International Bank L 1for Reconstruction and Developme VOL. 8

V.(1O

Preliminary Paper No. 8

for the

Wlorking Party on the Polish Loan Application

FILE COPY

Foreign Trade in Poland

Issued by:Eastern European DivisionLoan Department June 1, 1947

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Acknowledgment

The study which follows was prepared

by the Division of Operational Analysis, UNRRA

Mission, W,arsaw, in collaboration with various

agencies of the Polish Government. The report,

based upon a paper on the same subject origin-

ally issued by the European Regional Office of

TUNRRA in London, is presented here because it

is believed to give the most complete account

of recent developments in the foreign triade of

Poland currently available.

CONTENTSPag,e

I. INTRODUCTION . . . . . . . . . . . . . . . . . . . 1

Results of Occupation and War Devastation . . 2Effects of Territorial Changes . . . . . . . 6The Changed Commercial Organization . . . . 7UNRRA's Part. . . . . . . . . . ... . . . . . 12

II, TRADE DEVELOPMENTS, 1919 to 1939 . . . . . . . . . 13

Difficulties in Building Poland'sForeign Trade . . . . . . . . . . . . . . . 13

Direction of Polish Foreign Trade. . . . 17Composition of Polish Foreign Trade. . . 20

III. POSTWAR CHANGES... . . . 23

Prospective Changes in Exports. 25Losses: Timber . . . . . . . . . . . . . 25

Food . . . . . . . . . . . . . . 26Potassium. . . . . . . . . . . . 28

~~~~~~ ~~~~~Oil . . . . . . . . . . . . . . . 29Gains: Coal . .29

Iron andaSteel . .30Non-Ferrous Metals . . . . . . . 31Other Gains. . . . . . . . . . . 31

Changes in Import Requirements. . . . . . . . 33Industrial and Transport Equipment . . . 34Petrol and Oil . . . . . . . . . . . . 35Raw Materials. . . . . . . . . . . . . . 35Fertilizers. . . . . . . . . . . . . . . 36

Future Outlook. . . . . . . . . . . . . . . . 37Changes in the Direction of Poland's

Foreign Trade . . . . . . . . 38Germany .. 38U.S.S.R . . 39United States. . . . . . . . . . 41United Kingdom . . . . . . . 42Other Countries . . . . . . . 43

IV. FOREIGN TRADE SINCE LIBERATION .43Commercial Agreements . . . . . . . . . . . . 45Prices and Values . . . . . . . . . . . . . . 49Trade in 1945 and 1946. . . . . . . . . . . . 51Foreign Trade and UNRRA Imports . . . . . . . 60Summing up. . . . . . . . . . . . . . . . . . 65

V. POLAND'S TRADE PROSPECTS FOR 1947 TO 1949. . . . 66

Foreign Trade 1946 to 1949. . . . . . . . . . 67Imports and Exports in 1947 . . . . . . . . . 69Balance of Payments in 1947 . . . . . . . . . 761948 and 1949 . . . . . . .. . . . .. . . . 83

APPENDIX - Trade Agreements Concluded by Polandto 31st December, 1946 . . .... . 86

I. INTRODUCTION

No other country in Europe suffered upheavals so great or so

widespread as did Poland during the war. Not only was the coun-

try devastated on an unparalleled scale, its population killed

off and scattered throughout Europe, but, following the war,

great changes have been made in its boundaries which will funda-

mentally affect the nature of the economy.

It is important, when considering foreign trade in Poland,

to distinguish between the effects of war devastation and the

effects of territorial changes. The effects of war devastation

are temporary. They have created an emergency need for imports

on a tremendous scale of a completely different character from

the imports required in the long run; thus, the needs of food in

1945, 1946 and 1947 are great, 'ut quite temporary. Similarly,

the needs for investment imports to rebuild industry, transport,

and agriculture are on a scale which cannot be sustained. At the

same time war devastation has seriously curtailed Poland's

ability to export so that she needs, for several years, a large

excess Qf imports over exports.

lWhile these considerations will affect Poland's foreign

trade in the next three years, it is the territorial and popu-

lation changes which will leave a permanent stamp on Poland's

foreign trade. In the first place, although the territorial

changes have left agricultural potential almost unchanged, they

have more than doubled Poland's industrial potential. It is

clear, therefore, that in the long run Poland's imports and ex-

ports will be on a scale very much higher than before the war.

- 2 -

Furthermore, these changes will create a new pattern of inter-

national trade. Poland now has large quantities of coal avail-

able for export. At the same time she has lost over three-

quarters of her crude oil production and must now import oil on a

considerable scale. Her timber resources are so reduced that it

will be many years before timber, which was so important in her

pre-war trade, can figure in her exports again. The addition of

the industrial areas has in some cases reduced the needs for raw

materials but in most cases, owing to the fact that, before the

war, these areas imported large quantities of raw materials,

there is now a greatly increased demand for raw materials, such

as iron ore, scrap iron and textiles. Furthermore, owing to the

increased industrial potential, it is certain that much greater

requirements of capital equipment of all kinds will in the long

run be required by Poland. When agricultural and industrial

production reach their full strength the national income per

capita will be twice that before the war; this will lead to fur-

ther changes in the pattern of Poland's imports. Needless to

* say, the reduction in population will ultimately leave mucb

larger quantities of food available for export and her expanded

industry will enable her to export her products on a much greater

scale than before the war.

Results of Occupation and War Devastation2

Poland was occupied by Germany in September, 1139; the

westernmost parts of the country were not liberated until the

spring of 1945. For five and a half years, therefore, "oland

was subjected to ruthless exploitation by an enemy whose p<l--y

of extermination of the Polish people was limited only by the

necessity of making the fullest possible use of the country's

3-

resources and labor for the benefit of his war effort. A large

proportion of the country's industrial machinery and equipment

was removed into Germany, and other installations, especially

those not immediately needed for war purposes, were allowed to

fall into a state of utter disrepair. Several million men and

women were removed into Germany for forced labor.

In agriculture a large proportion of the existing livestock

was slaughtered. At the end of the war Poland had less than

one-third of her prewar total of cattle and about one-fifth of

her pigs and sheep. Horses, which played such an important part

in the country's farm economy were reduced to about one-third.

Fat, meat and milk production were reduced to less than one-

quarter of the prewar total. During the war, one in every six

of Polandis farms was put out of action or entirely destroyed.

Available farm animals, fertilizers, machinery and seed are all

less than are required by Poland to feed herself. The ex-German

territories which formally produced food surpluses are now a

food deficit area - in fact, many of the former German farms are

still derelict because of the war.

In 1946 Poland's production of wheat wuas 31 percent of the

prewvar total, and the important rye crop only 42 percent of pre-

war production. Potatoes, which are the most important root-crop,

were reduced to one-half. Formerly Poland exported food - before

the wrTar 44 percent of her exports were farm and forest products.

In 1946, without UNFRA's assistance, the Polish people would

have s tarvedL.

Industrial problems wnrere likewise catastrophically affected

by the war. In spite of the acquisition of the recovered terri-

tories, which before the war had an industry equal in size to

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that of all Poland, industrial production in 1946 vwas only 67

percent of prewar.

Tf to this is added the fact that during the war over six

million Poles lost their lives, it will be clear that several

years and substantial internal economic reorganization will The

required before Poland can reach her prewar level of exports.

During the war the country itself was divided in two, the

western part having been incorporated into Germany and the rest

organized as the so-called "General Government". This, of

necessity, distorted the wrhole economy of Poland. While the

western part was within the German customs area it was separated

from the "General Government" by a tariff barrier which ran

across the heart of Poland. During these years both areas were,

of course, entirely cut off from most of their prewar markets,

and had only a very limited trade with some of the other countries

of German occupied Europe.

The battles fought during the German invasion in 1939 and

the period of Soviet liberation, from 1944 to the end of hostili-

ties in 1945, resulted in widespread destruction of buildings and

industrial equipment. Warsaw was almost entirely destroyed and

the industrial capacity of such towns as Poznan, Rzeszow, Radom,

Bydgoszcz and WA!roclaw was very substantially reduced. The ports

of Gdansk (Danzig) and Gdynia were made unusable and the country's

system of internal communications was almost vwholly ruined. 1/

1/ For details of the damage done to Polish transport, industry,and agriculture respectively, see: Operational Analysis PapersNo. Transport Rehabilitation in Poland, No. Industrial Re-habilitation in Poland, and No. Agriculture and Food -inPoland, UNRRA European Regional Office, London.

-5-

Poland's war losses are summarized in the following tabhle.

This table shows only material losses in the old territories

within the present boundaries of Poland, and leaves out of acc-

ount completely the heavy destruction in the recovered territories

which must have been about the same magnitude.

TABLE I

Poland's War Losses (Old Territories)(in million dollars at 1946 prices)

Agriculture 1,640Forestry 1,120Industry 5,560Transport & Communications. 3,470Public Administration 940Schools and Hospitals 750Houses and Personal Property 2,96o

Culture and Art 1J 80

Total 18,220

Source: Council of Ministers, 'Warsaw, 1947.

In the old territories alone, Poland suffered war losses of

18.2 million U.S. dollars in the form of Ihuildings, plant and

0 equipment, and raw materials. This omits altogether losses in

the form of the labor of the Polish population during the war,

which was entirely at the disposal of Germany, and the tremendous

losses of the Polish population in the form of death, disablement,

and the legacy of serious illness in Poland today.

It is clear that the effects of occupation and war devastat-

ion on such a scale make Poland's immediate postwar foreign

trade completely different from her prewar trade, and her ultim-

ate commerce with other nations. The needs for relief and for

the initial rehabilitation of industry have assumed paramount

importance in her import program, while the limitations on indus-

trial recovery imposed by the great devastation have seriously

-6-

curtailed her exports.

Effects of Territorial Changes

As a result of the Yalta, Moscow and Potsdam agreemenQs

impoortant revision were made in Poland's frontiers. About 181

thousand square kilometers of predominently agricultural land in

the east were transferred to the U.S.S.R. while 104 thousand

square kilometers of territory, including the valuable industrial

area, of ex-German Silesia, together with a section of the Baltic

coast and of East Prussia, vwere acquired from Germany. As a

result, the area of Poland was reduced by 20 percent, to 312,700

square kilometers. These changes in territory and wartime up-

heavals between 1939 and 1946 reduced the country's population

by over 30 percent and its population per square mile by 16 per-

cent; today the population of Poland is about 24 million.

The territory acquired in the West was, before the war, more

productive agriculturally than that transferred to the U.S.SR

It is also true that the acquisition of the rich industrial area

of ex-German Silesia and of the port of Stettin have more than

doubled Poland's industrial potential. Since, however, the

territories involved were ruthlessly scorched by the Germans,

Poland's immediate industrial rehabilitation problem has been

greatly increased.

Table II, comparing industrial output in 1937 in the terri-

tories of prewar Poland, gives a clear picture of the changes in

industrial resources as a result of frontier revision.

As the table shows, Poland has now only 23 percent of her

former oil caDacity and none of her former resources of potassium

salts5 but has gained, in comparison with prewar, some very

importgnt coal mines, which, at their prewar capacity, would

-7-

increase her coal production by as much as 80 percent at the end

of the four year plan actual production will be more than twice

the prewar level. Moreover, the country acquired increased de-

posits of iron ore, lead and zinc, and materials such as cadmium,

cobalt, gypsum, gneiss and knolin for wmhich she was formerly

entirely dependent on imports. Her steel producing capacity has

expanded by 48 percent.

Other changes in Poland's postwrar economy and their bearing

on the country's foreign trade prospects will be discussed in

* detail in the following sections of this Paper.

TABLE II

Poland's Industrial Production after Frontier Revision

(Production in 1937 in thousands of metric tons)

Prewrar Postwar Percent Increase(+)Poland Poland or Decrease ()

Pit Coal 36,200 65,650 + 78.6

Coke 2,124 5,353 +152,0

Lignite 18 7,611 Increased 412 timez

Zinc and Lead 492 1,214 +146.8

Iron Ore 792 865 + 7.9

Steel 1,;441 2,141 4 48.o

Crude Oil 501 141 71.9

Potassium Salts 522 0 -100.0

Source: Data supplied by the Polish Government except forthe production of pit coal, figures for which arebased on Statistical Year Book for Poland, London,1941. Figures for ex-German territories are fromGermany Basic Handbook, Section F. The MineralIndustries, Foreign Office and Ministry ofEconomic WP.arfare, London, 1941.

The Changed Commercial Organization

It is necessary, in order to understand Poland's postwar

foreign trade, to describe briefly the postwar economy.

Essentially the Polf.sh economy is a combination of nationalized

industry and private enterprise. At present about 80 percent of

the country's working population wrork in private enterprise,

while about 20 percent work in nationalized industry or central

and local government administration. In the nationalized sector,

which covers all the heavy industries and heavy engineering in-

dustries, a rigidly controlled structure of prices and wages is

at present in existence. These prices and wages are fixed on the

basis of strict economic costs, and an effort is made to ensure

that wage rates bear correct relations one to another, and that

all prices of commodities are true economic prices, including

the correct allowances for costs of labor and raw materials,

depreciation of capital, and management expenses. The free

enterprise sector of the economy, however, is free from all con-

trol, except that imported raw materials and raw materials in

short supply must be obtained through central government agencies.

Within this sector prices are many times higher than in the con-

trolled sector. For instance, while a ton of coal is sold by the

coal industry at 590 zlotys, a single meal in a free market res-

taurant costs about the same price and a pair of shoes in the

free market costs 15 thousand zlotys.

It is because of this dual price system that the Government

had to fix an official rate of exchange of one hundred zlotys to

the dollar, which, in fact, rules out normal international trade

through the free market. It is also the reason that Poland has

had to conclude commercial agreements with the rest of the world

on the basis of self-balancing barter agreements involving no

movements of foreign exchange. The trade which is carried on

outside trade agreements is either bi-lateral barter operations

- 9 -

by individuals or companies, which occurs when the prices in

Poland and in the other countries are such as to make the trade

profitable, or, in some cases, exports and imports arranged for

free exchange at the official rate. Every operation carried on

outside the trade agreements must, of course, be covered by im-

port and export licenses.

It is obvious that the zloty cannot be stabilized in the

near future; stabilization awaits the equalization of controlled

and free market prices and the end of price fluctuations in the

outside world. WNhile two price levels exist within the country

the zloty cannot be assigned a fixed value which will enable

foreign comimerce to be carried on on a free trade basis.

Furthermore, large price fluctuations in the outside world., and

the inflationary pressures on world prices, combined with the

stabilization of prices in Poland, has made any realistic rate of

exchange for the zloty impossible for the moment. The problem

of stabilization of currencies is, of course, world-wide and one

which should be solved by the International Monetary Fund.

Poland is a member of this organization and, when cQnditions are

judged favorable, will co-operate with other nations, through the

Fund, in stabilizing the zloty.

As a result of the nationalization of her major industries,

and, to some extent, of her distribution system, the foreign

trade of the country is now largely controlled by state depart-

ments, co-operatives or state sponsored companies. The main

Government Department concerned is the Ministry of Navigation

and Foreign Trade, which is in charge of trade negotiations with

foreign countires.

As in most countries during and after the war, in Poland

- lo -

imports and exports are controlled by Government permits. Al-

though prewar tariff legislation is still in force, it is not

applicable to conditions existing today, and it has been sus-

pended except for small additional costs or duties which are

levied on goods produced under a State monopoly such as tobacco

and matches. The Government intends to give up the policy of

tariff protection. Although the system of fixing the prices of

commodities entering into foreign trade may appear to be a sub-

stitute for tariff, in fact, dince the prices are made to conform

to the controlled price structure, this is a temporary measure

due to the necessity of adapting prices of the commodities to

the Polish orice level. In fact, all the effects of tariffs and

export duties in obtaining favorable terms of trade can be ach-

ieved in the terms of the barter agreements themselves and further

price adjustments are irrelevant.

For the foreign trade transactions of enterprises which

belong to the nationalized sector of Polish industry, special

central trade bureaus were established, one for each major

branch of industry. These bureaus are limited companies, the

shares of Which are owmed by the respective federations of fac-

tories, These bureaus also act on behalf of co-operatives and

private firms in negotiations with foreign traders. However, it

should be noted that they have no monopoly of foreign commerce.

Private and public enterprise, which even have their own foreign

trade agencies, may deal direct with foreign traders,simply by

obtaining the necessary export or import licenses granted by the

Ministry of Navigation and Foreign Trade. The procedure for ob-

taining export and import licenses i$ the same, whether the app-

licant is a central bureau or a private enterprise. The central

- 11 -

bureau or a private enterprise. The central bureaus are organ-

ized into branches, each bureau dealing with a different comm-

odity. The co-operatives "Spolem" and "Zwiazek Samopomocy

ChXopskiej" deal chiefly with imports and exports of agricultural

produce. No restrictions are imposed on private commercial

enterprise regarding the commodities dealt in.

The Spolem co-operative imports foodstuffs into Poland for

planned, countryside state distribution and also for distribution

through the open market. This co-operative, which has the right

to exDort directly certain agricultural products,V2 does not,

however, handle food supplied by UNRRA. The Co-operative

"Zwiazek Samoponocy Chlopskiej" and the commercial enterprise

"Dal" also import foodstuffs.

Private merchants tend to deal with commodities manufactured

or used by small and medium sized private undertakings. Subject

to Government licensing, private barter transactions are en-

couraged, besides exercising a general control over the type of

goods exported and imported, the Government is, of course, also

concerned with prices and the mechanism for effecting the

exchange.

1/ The term "foodstuffs" includes groceries, rice, grain, flour,root-crops, edible fats, dairy products, seeds and vegetables-fresh and tinned, but Spo%em does not include in its scopelivestock, bacon, ham and meat preserves. This co-operativeagency has the exclusive right to import agricultural anddairy machines, parts thereof, and fertilizers.

2/ These include dried ahdfresh berries, mushrooms, medicinalherbs, vegetables, seeds, bristles, horse-hair, tinned vege-tables, dairy produce, eggs, poultry, feathers and down,and agricultural machinery.

- 12 -

UNRRA's Part

W7hen UNRRA commenced operations, the requirements of Poland

were calculated for a country of undefined area and with a

num'oer of inhabitants not yet precisely known. It was not until

the Potsdam conference that the scope of the changes in territory

and economic resources were even approximately known. However,

it wqas clear that Poland was in great need, not only of food but

of clothing and medical supplies, and of commodities required for

the rehabilitation of her agriculture, industry and transport.

It was also clear that Poland did not possess sufficient gold

and foreign exchange to pay for these.

In September 1945, Poland, therefore, concluded a basic

agreement with UNRRA whereby full scale relief and rehabilitation

assistance was to be given her; UNRRA's total assistance to

Poland is valued at 481.3 million U.S. dollars. The expenditure

of this sum is shown in the following table:-

TABLE III

Proposed Program of UNRRA Assistance to Poland0 (in millions of U.S. Dollars)

Categories of Aid Value

Food, Feed and Soap 201.52Clothing, Textiles and Footwear 82.7Medical and Sanitary Supplies 25, 8Industrial Rehabilitation Supplies 95.34Agricultural Rehabilitation Supplies 75.9

TOTAL 481.26

Source: UNXRA Bureau of Supply, WNashington

By the end of 1946, TURRA had supplied Poland with goods for

a total of 398 million dollars. These UNRRA commodities repre-

sented about 65 percent of Poland's total imports since the

end of the war which totalled 609 million dollars. Although

after the end of the war the Polish Government has concluded

- 13 -

compensation agreements with various countries, valued at 447,

million dollars, up to the end of 1946, imports under these

agreements were valued at only 173 million dollars. Whereas

deliveries under most of these compensation agreements are still

to come, only some 83 million dollars of the UNRRA program re-

mains for delivery in 1947. It is evident that Poland will he

in a very precarious position in 1947 unless other sources of

essential imports are found. The aid given by UNRRA has not been

sufficient to rehabilitate, or even to feed Poland adequately;

without external aid of some kind in 1947 and a rapid revival of

her foreign trade Poland will again be close to starvation and

the progress of her economic life generally will be seriously

impeded. It is therefore important to examine Poland's postwar

trade prospects in some detail: an attempt to do this is made in

the following pages.

II. TRADE DEVELOPMENTS, 1919 to 1939

Difficulties in Building Poland's Foreign Trade

0 Before 1914 Poland did not exist as an independent country.

It was partitioned between Austria, Germany and Czarist Russia,

and the area concerned was regarded as a kind of economic hinter-

land by these three powers. Of necessity, wNhen she gained inde-

pendence, the economy had to be integrated and completely new

foreign trade patterns built up. Such economic adjuastments wTere,

of course, difficult and developed slowly. Poland had only .ust

succeeded in overcorniL.g this initial handicap and building up a

successful system of foreign trade when Germanyr rvt&v n in

1939.

The years from 1919 to 1924 were too unsettled to permit of

anything approaching normal foreign trade - or even collection of

- 14 -

complete foreign trade statistics. To the handicap of the long,

pre-1914 partition, there was added the further handicap of a

five years' delay in economic reconstruction. Another factor of

importance was the lack of facilities for sea transport; although

Gdansk existed, Polish traffic was discriminated against and,

pending the construction of the port of Gdynia, a major seaport

belonging to Poland herself, port capacity was inadequate. After

1924 , energies which otherwise could have gone into the re-

establishment of foreign trade for the benefit of Poland's

standard of living and the development of her industries, were

diverted into the building of a Polish port and the re-adjustment

of transport facilities from the interior to the coast.

It was not until 1924 that modern Poland emerged as a cornm-

ercial nation. Even then, trade was conducted mainly with thc

Continent of Europe and particularly with her immediate neighbors

to the West, Germany, Austria and Czechoslovakia. As late as

1928, only 2,7 percent of all Polish exports went to overseas

cotmtries outside Europe. The main reasons for this were the

burden of adjustment to the economic unification of the country,

transport problems, and the bulkiness of Polish exports.

Poland depended on Germany for a considerable section of

its agricultural exports and industrial imports. Germany tried

to exploit this dependence by tariff discrimination against

Poland, which resulted in a tariff war, lasting from 1924 to

1933. In the course of this economic struggle, Poland changed

the direction of her foreign trade from Germany to the countries

of nothern Europe and to those across the seas. The share of

Germany and Austria in Poland's foreign trade fell from about 50

- 15 -

percent in 1924 to only 20 percent in 1932. These adjustments

could only be achieved by radical changes in the composition of

Polish exports and imports, which of course, protracted the per-

iod of economic adjustment to postwar conditions.

0

0

- 16 -

TABLE IV

Poland's Foreign Trade 1922-1938(in million zlotys)

Year Imports Exports Balance

1922 1,454 1,127 - 3271923 1,920 2,056 + 1361924 2,542 2,177 - 3651925 2,755 2,188 - 5671926 1,539 2,246 + 7071927 2;892 2,515 - 3771928 3,362 2,508 8541929 3,111 2,813 - 2981930 2,246 2,433 + 1871931 1,468 1,879 + 41932 862 1,84 9+ 2221933 827 960 -e 1331934 799 975 + 1761935 861 925 + 641936 1,003 1,026 ± 231937 1 254 1,195 - 591938 1,300 1,185 - 115

NOTE: All figures are computed in gold Zlotys -5924.44 zlotys per kg. of pure gold.

Source: Concise Statistical Year-Book of Poland

The world depression of the early thirties affected the

Polish economy with particular severity because of the country's

rigid and orthodox domestic economic policy. The Polish zloty-/

did not follow the pound sterling and the U.$. dollar, and was

not devalued during the 1931 - 1933 period. As a result of this

reluctance to assist the revival of exports by currency devalua-

tion, .Polish exports and foreign trade generally suffered more

than that of other countries during the world depression and de-

clined in value by over two-thirds between 1929 and 1933.After19335

there was a slight revival, but trade figures failed to recover

even to one-half of 1929 values. In the years of depression the

1/ In 1937 the value of the Polish zloty was about 19 U.S. centsand about 9d. sterling.

- 17 -

country's export surplus was never really large enough to permit

of even a full service on the Polish external debt.

Table IV shows the history of Poland's imports and exports

from 1922 to 1938. Until 1930, as might be expected, imports ex-

ceeded exports by some 240 million zlotys per annum; during the

depression exports exceeded imports and it was not until 1937 that

Poland again imported in excess of her exports. It is ilnteresting

to note that the balance of trade depended mainly upon capital

movements. During years of world prosperity Poland was a field

for foreign investment by other countries and imported capital on

a large scale; during depression year, on the other hand, Poland

herself had to export capital. The excess of exports over imports

was then necessary to meet financial commitments abroad. The

following table shows three items in the balance of payments from

1927 to 1937; interest movements, gold movements and capital

movements.

TABLE IVa

Interest,, Gold and Capital Movements 1227 to 1937

Year Interest Gold Capital

1927 - 230 -282 5051928 - 284 -107 +1, lo91929 - 379 - 81 T 5931930 - 450 + 141 - 4161931 - 417 - 61 - 41932 - 285 - 13 - 32

1935 - 145 + 22 - 1081936 - 172 + 18 - 1471937 - 177 124 - 39

E= xcess of inward movement over outward movement.

Source: Ministry of Navigation and Foreign Trade, Warsaw.

Direction of Polish Foreign Trade

The following table shows the most important countries to

which Poland's exports went in 1937 and 1938. Later export figures

- 18 -

cannot be regarded as representative owing to Germany's annex-

ation of Austria and parts of Czechoslovakia in 1938.

TABLE V

Poland's Exports in 1937 and 1938 to its Leading Markets

Percent ofMillion Zloty Total Polish

Country (annual average) Exports

Germany and Austria 259 21.7United Kingdom 218 18.2United States 82 6.9Sweden 73 6.2Belgium 63 5.3Italy 60 5.0Holland 58 4.80w Czechoslovakia 48 4,0Norway 21 1.8

TOTAL 882 73.9

Source: Concise Statistical Year-Book of Poland.

The table shows that, in 1937 and 1938, the United Kingdom

was equal with Germany (including Austria) as the most important

ofPoland's markets. The importance of Austria may be judged

from the fact that, in 1937, it received 4.9 percent of Poland's

exports. The large exports to the United Kingdom and to the

United States were of great value to Poland, partly because they

permitted the country to escape German economic domination and

partly because they enabled her to earn free currency which could

be used to buy goods which Poland really wanted from the cheapest

source of supply. The important part played by Italy, the

Scandinavian countri6s, and western Europe in Poland's trade is

also worth noting; especially in the case of the Scandinavian

countries and of Italy, this was due mainly to the large purchases

by these cquntries of Polish coal.

The most important Polish suppliers in 1937 and 1938, with

their respective shares in total Polish imports, are shovm in

- 19 -

the next table:-

TABLE VI

Poland's Imports in 1937 and 1938 from its Leading Suppliers

Percent ofMillion Zloty Total Polish

Country. (annual average) Imports

Germany and Austria 269 21.2United Kingdom 148 11.6United States 154 12.0Holland 47 3.7Belgium 55 4.3Czechoslovakia 42 3.3India 43 3.4France 43 3.4Australia 33 2.6

TOTAL 834 65.5

Source: Concise Statistical Year-Book of Poland,September, 1939 - June, 1941

Comparison of Tables V and VI shows that the United Kingdom

was much more important to Poland as a market than as a source of

surply. In other vwords, in her dealings with the United Kingdom,

Poland had an export surplus which helped to finance her supplies

from overseas, very largely from the British Commonwealth and

empire and the United States; in fact, while India and Australia

were among Poland's ten most important suppliers, they were not

among the country's ten most important export markets.

As a supplier the importance of the United States was prac-

tically the same as that of the United Kingdom; in 1938 the

United States actually became the more important source of supply.

As an export market, on the other hand, the United States ranked

fairly low on the list. In fact, Polish foreign trade, although

balanced as a whole, consisted of an intricate network of export

and import surpluses with different countries; on the whole

Poland financed her imports from overseas by selling to Europe.

Poland's total foreign trade, hovwever, was not large. For

- 20 -

1926 - 1935, on a per capita basis, it was about one-tenth of

that for the United Kingdom, Belgium, Holland, Norway or Switz-

erland; and one-fifth of that for France, Germany or Czechoslo-

vakia. Comparing foreign trade with the national income of the

country her imports in 1938 were equal to only seven and a half

percent of the national income, and her exports were equal to

seven percent. The country's prewar volume of foreign trade

did not, however, reflect the full trading potentialities of the

country, and postwar changes in territory have vastly increased

Poland's potential importance in world trade.

One further point may be noted - the small volume of trade

with the U.S.S.R.. a country with an even smaller foreign trade

per head of population. The main reason for this low volume is

that the main exports of the two countries were similar. Both

exported agricultural produce and timber; the industrial goods

which Poland needed could not be spared by the U.S.S.R. which

was itself engaged in a process of heavy and sustained

industrialization.

Composition of Polish Foreign Trade

Turning from the distribution of Polish trade bet,ween

countries to its composition by commodities, the following

table throws light upon the major items which Poland exported

and imported in 1937 and 1938:-

- 2.1 -.

TABLE VII

Polish Exports in 1237 and 1938

Million Zloty Percentage ofCommodity (annual average) Total Exports

Agricultural Products 318 26.7Hams, hams in tins 55Bacon 47Pigs 35Eggs 36Other animal products 52Barley 40Other crops 53

Coal 201 16.8

Timber 200 16.8

Iron and Steel 74 6.2

Zinc 32 2.7

All others 365 30.8

TOTAL 1,190 100.0

Source: Concise Statistical Year-Book of Poland,London, 1944.

As Table VII shows, in 1937 and 1938, 60 percent of Poland's

exports consisted of agricultural products, coal and timber.

These may be considered to be Poland's three staple exports.

Agricultural products accounted for over one quarter of all ex-

ports, animal products representing 70 percent of these. Poland

concentrated on the more highly processed animal products such

as hams, hams in tins, bacon and eggs. Pigs were also exported

in large numbers. Coal and timber each accounted for about one

sixth of total exports. Iron and steel accounted for 6.2 percent

of all exports and were exported as raw iron and steel, railway

rails, sheets and tubes.

TABLE VIII

Polish Imports in 1937 and 1938

Million Zloty Percentage ofCommodity (annual average) Total IYmports

Main raw materials 519 4o.8Textile Raw Materials 287Raw Hides and Skins 82Scrap Iron 69Ores 35Copper 31Rubber 15

Main Manufactured Products 326 25.6Machinery 205Chemical & Pharmaceutical 71Paper 8 Paper products 25Clothinig 25

Main Food, Drink and Tobacco 159 12.5Fruit 38Herrings 23Coffee, tea, cocoa 22Seeds, Fats and Oils 36Tobacco 40

All Other 268 21.1

TOTAL 1,272 100.0

Source: Concise Statistical Year-Book of Poland, London, 1944

Poland's main imports fall into three groups; raw materials,

manufactured products, and food, drink and tobacco. The main

imports of raw materials were textiles and hides and skins for

the clothing industry, which together accounted for about 29 per-

cent of all imports.- Scrap iron and ores together accounted for

another eight percent of imports. Adding rubber and cotton,

these principal raw materials together accounted for 41 percent

of all imports. Manufactured products were imported on a large

scale; machinery accounting for 16 percent of all imports, adding

chemicals, paper products and clothing, this group accounted for

26 percent. Food products were mainly items which could not be

produced in Poland, such as tropical fruits, coffee, tea and

- 23 -

cocoa, tobacco and sea fish. The foods enumerated in the table

accounted for one eighth of all imports. Mineral clays, pottery

and glass wiere also imported.

In nearly all classes of goods, Poland was both an exaorter

and an importer. In some important industries Poland may be said

to have occupied an intermediate position, in general exporting

raw! materials and semi-manufactures and importing manufactured

products. The steel industry, for example, imported ores and

scrap iron, exported intermediate products, but, again, imported

finished products such as cutlery. Similarly in the paper indus-

try pulp was exported while paper and cardboard were imported.

Notwmithstanding the small volume of its foreign trade, Poland

depended to an unusual degree on international specialization,

relying on foreign countries for highly processed manufactures.

As far as foreign trade was concerned, Poland might perhaps

best have been described as a semi-agricultural country with

three staple industries - coal, textiles and steel - and strong

traces of industrialization elsewhere but lacking in engineering

industries and their wide ramifications. It is evident that a

country in this position - lacking in industrial balance and

still at an evolutionary stage of economic development - should

have been specially dependent on foreign trade for the manufac-

tured products consumed by its population, and for the capital

equipment required for the development of its industry.

III. POSTWAR CIIANGES

Before dealing with postwar changes in Poland's basic re-

sources and their implications for the country's future foreign

trade, attention must be called to the special circumstances

resulting from the severe devastation of agriculture, and the

- 24 -

wholesale destruction or removal of industrial plant and trans-

port facilities, which Poland suffered during the war. These

circumstances have created immediate foreign trade problems com-

pletely different from those of a long run character. Owing to

devastation, production has been reduced drastically while, on

the other hand, requirements for rehabilitation of agriculture

and industry far exceed normal peacetime demand. Thus, Poland

cannot in the short run export agricultural products or timber,

and she must import capital equipment on a scale far in excess

of that before the war. It is clear that, in these circumstances,

imports will exceed exports for several years in order to provide

the necessary investments in Polish agriculture and industry; it

will not be until production has increased to prewar levels, and

industrial rehabilitation is complete, that any equilibrium be-

tween imports and exports could be achieved. In view of the fact

that, for many years to come, Poland will be a relatively undev-

eloped country, she is "import unended" and expects a continuance

of investment from abroad in the form of an excess of imports

over exports.

The war has brought -radical changes in Poland's long term

prospects of foreign trade. The acquisition of the recovered

territories has more than doubled Poland's industrial capacity;

Poland has acquired a greatly increased coast line, including the

port of Szczecin (Stettin) as well as the important river Oder;

in spite of the net loss of one-fifth of its area the country's

agricultural production could be the same as before the war; the

population has been reduced by 30 percent. All these important

changes will have great repercussions on Poland's foreign trade,

The national income of the country will increase in the long run

-25-

by roughly 50 percent and the national income per head by over

100 percent. This also will have repercussions upon foreign

trade in that, along with a higher standard of living, will

develop an increased demand for luxury articles from abroad.

There is thus likely to be not only a great expansion, but also

a change in the composition of both Poland's imports and exports.

Her exports are likely to include more coal, more food, and more

semi-manufactured products, while her imports are likely to in-

clude greater quantities of highly manufactured articles and

certain raw materials. Although the immediate postwar transit-

ional problems strongly affect the country's trade, the new long

term pattern of normal trade will gradually emerge and after

some time assert itself.

Prospective Changes in Exports

Losses

Timber: It is very unlikely that Poland will ever again

export timber on the scale she did before the war, when timber

and wood products accounted for 17 percent of all her exports.

Frontier changes caused a decrease of some 17 percent in the

Polish forest area and there are now only about 6.9 million hec-

tares under forests as compared with 8.3 million hectares in

prewar Poland. Production of timber will,however, for some time

be far below the 83 percent of prewar production which might be

indicated by the change in forest area. About 400 thousand hec-

tares were destroyed by the Germans by indiscriminate cutting

during the war and another 800 thousand hectares were extensively

thinned for use chiefly for mine props and pulp wood. The Germans

cut about ten yearls normal cutting during their occupation; as a

result the annual increment of forest growth has fallen

- 26 -

sharply. Whereas before the war about two cubic meters per hec-

tare were obtained, at the present time the annual increment is

only some 1.5 cubic meters. In view of the urgent need for re-

building the country it is estimated that during the whole of

the Four Year Plan cutting will exceed the annual increment by

about 25 percent; even so there will remain a large deficit of

8-10 million cubic meters of timber and forest products annually

which can only be met by imports.

Turning to the long range prospects of Polish timber exports,

the situation obviously depends on the extent of re-afforestation

and the extent to which the annual increments obtained before the

first world war, which amounted to 3.2 cubic meters per hectare,

can be regained. In the year 1939 about 2. million cubic meters

were exported out of the annual production of ten million cubic

meters i.e. 25 percent, thus, if demand ultimately falls to the

same level as before the war it would be expected that about one-

third of the prewar exports could still be achieved ir the long

run. It is likely, however, that Poland's increased industrial

apparatus will greatly increase the requirements of timber in

Poland and an increase of only ten percent above prewar levels

wvould, unless the annual increment exceeded prewar levels, elim-

inate the possibility of exports. It is clear, therefore, that

exports of timber from Poland are impossible for one or tvwo' de-

cades and that, even afterwards, resumption of exports will de-

pend upon greatly expanding the annual increment in forest

growTth.

Food: Devastation of Polish agriculture has, for all prac-

tical purposes, eliminated the possibility of Poland exporting

food until 1949. Immediately after the war crop production was

- 27 -

only some 35 percent of Drewar levels, and the livestock popula-

tion was reduced to 57 percent of prewar in the case of horses,

40 percent in the case of cattle, and 30 percent in the case of

pigs. It is clear, therefore, that, although the population of

Poland has fallen by some 30 percent, there is, instead of the

surplus of foodstuffs for export which existed before the war, a

serious deficit. In the food year 1946/47, for example, produc-

tion is about 38 percent of prewar, yet the amount of food needed

for internal consumption on prewar standards is about 64 percent

of prewar production; there is thus a deficit of about a quarter

of the prewar production. Even at the end of the Four Year Plan,

in 1949, production will only have recovered to 80 percent of

prewar production, but it should be possible, because of the fall

in the population, to export about half the value of the food ex-

ported before the war. Until this date there will be some sur-

pluses of pork, poultry and eggs. Most if not all of the foreign

exchange obtained from such exports, however, will be needed to

import other foods of high calorie content in order to increase

the total calories available for the Polish population.

The export of particular foodstuffs is not inconsistent

with the general deficit in Poland, which will persist at least

until the end of 1947. Poland may thus export certain highly

processed luxury foodstuffs in 1947 so as to obtain in return

larger quantities of special foods and, in particular, fats, of

which there is a grave shortage, Ham and eggs, for example, may

be exported to obtain in exchange twice the number of calories

in the form of fats or fish. Furthermore, pigs and poultry pro-

vide means of utilizing the large quantities of waste which is

generated in a peasant farming system. In 1947 there will be

- 28 -

taken exports of this type of food and in 1948 they should

increase considerably.

The long run prospects for Polish food exports are very

favorable -/. Although the country is one-fifth smaller in area

than before the war the areas taken over from Germany were very

productive and, by achieving prewar standards of cultivation

throughout Poland, agricultural production could ultimately be

about the same as before the war. With a reduced population

consuming on prewar standards this would leave a margin for ex-

port about five times as great as before the war. If, however,

as will obviously be the case, the standard of food consumption

in Poland increases, exports would not expand to this extent. It

would, however, be safe to say that, even witb a considerable

increase in domestic consumption, food exports could be three

times as high as before the war, on present values, some 300

million dollars per annum. It should be noted, however, that

much more fertilizer was appliQd to land in the recovered terri-

tories than to land in the areas transferred to the U.S&S,R. and

the attainment of prewar levels of production would involve

greatly increased imports of fertilizers.

PotaEsium:

Before the war, the annual production of 560 thousand tons

of potassium salts resulted in valuable exports of such salts;

since as a result of frontier revision, Poland's entire resources

of Dotassium were transferred to the U.S,S.R., such exports are

no longer possible.

1/ See UNRRA Regional Office, Food and Agriculture in PolandOperational Analysis Paper N_o. London. 1947

- 29 -

Oil. Owing to territorial changes Poland has lost about

three-quarters of her former oil production. Although this does

not affect Poland's exports, it will affect her balance of pay-

ments by creating additional import needs.

Gains

Coal: The Silesian coal field, which contains the largest

knovm coal resources in continental Europe, resources said to

be eveniarger than the Ruhr or the Don, is now within Polish

territory. Once the mines are brought back to prewar levels of

production, this should increase the country's coal production

by as much as 28 million tons, or raise it to 80 percent above

the prewar level. It is clear that, although there will be in-

creased demands for industry and transport in Poland, the export-

able surplus of coal, coke and coke products will be even larger

than before the war and that these exports wrill become the main

pillars of the Polish export trade.

Rehabilitation in coal production is making good progress;

by Dec3Tbher 1946 the mines were producing at 85 percent of their

1937 or-cuction, and their total output was already 50 percent

greater than Poland's prewar production. In the year 1946 pro-

dUctM-1o. In the year 1946 production was 47.3 million tons and

exporLw amounted to 14.2 million tons, more than before -nhe war.

It is planned that by 1949 production will have expande to 80

million tons of which 35 million tons will be exported, three

times as much as before the war. In that year the value of coal

exports, at current prices, will be some $350 million. Ultim-

ately coal production is expected to reach 100 million tons per

annum,

Export prospects for the future are excellent. Great

- 30 -

Britain has dropped out of the export market, German production

is only a fraction of prewar levels, Demand, on the other hand,

is higher than ever before throughout Europe. Industrial pro-

duction in Denmark, Norway, Sweden, the U.SoS.R., France and the

Balkans depends to a large extent on Polish coal for its source

of power, and for many years to come it is likely that Poland

will have little difficulty in selling coal abroad. She wJill,

therefore, be able to derive valuable imports from her exports of

this much desired international commodity. Even if British and

German production recovers sufficiently for these countries to

resume exports, it is likely that Polish coal will continue to

maintain its advantage since output per head was always high,

much higher than in the Ruhr or the United Kingdom and, further-

more, levels of vwages in Poland were much lower than in these

countries.

Poland's coking capacity has benefitted even more than her

prospective coal output from the acquisition of German Silesia.

Poland has acquired one and a half times as much as her old

capacity from Germany, bringing the total capacity today to two

and a half times what it was before 1939.

Iron and Steel: Production capacity of the iron and steel

industry has also been greatly increased by territorial gains in

the West - pig iron capacity by abou-t one-half and hot rolled

products by about 40 percent. It is difficult to estimate bow

far iron and steel exports could expand beyond the level pre-

vailing before the war. Potential Polish industrial capacity is

more than double that before the war and may well absorb the

whole of the increased production available. At present rehab-

ilitation of the iron and steel industry is extremely difficult,

- 31 -

since it requires a great deal of investment in modern equipment,

particularly in rolling mills. Although iron and steel produc-

tion will expand steadily through the Four Year Plan, from 800

thouosand tons of rolled steel productsin 1946 to 105 million

tons in 1949, requirements of industry, communications and re-

construction will expand much more rapidly and, far from there

being any prospect of resumption of exports, there will be an

increasing deficit.

Non-Ferrous metals: Increased deposits of lead and zinc

will more than double Polandts prewar output of these metals,

and have already resulted in greater availability for export.

Here again, however, expansion of exports beyond prewvvar levels

depends upon the requirements of Poland's expanded industry. It

is likely, however, that a marked increase in Poland's export

of non-ferrous metals will take place. However, since Poland

has now acquired a large amount of zinc and lead ore capacity,

production of these metals will, in the future, not be based on

imported ore.

Other Gains

In addition to the coal, iron and steel and non-ferrous

metals industries, Poland has acquired considerable industrial

potential in the west, particularly in the remainder of Upper

Silesia (formerly belonging to Germany) and in Lower Silesia.

Great reserves of power derived from coal and water together

with such minerals as cadmium, cobalt, gypsum, gneiss and knolin

for the natural basis for industrial development in this area.

Before the war, the ceramic, cement, glass, cotton and flax

industries of Silesia were well known for the quality of their

-tn"^AIl+ Inl OhQa -;n ̂ -n s t MI .r c, 7 4-Qfrt 4 4,.of>

- 32 -

large industries including electrotechnical and chemical works,

factories producing photographic, optical and medical equipment,

paper mills, food processing plants and saw mills.

All these industries suffered considerably from direct war

devastation as well as from the removal of machinery. There is

not enough information available at the present moment to

estimate their potential to provide surpluses for export. How-

ever, since before the war roughly seven percent of the Agricul-

tural and Industrial production of these territories were ex-

ported, it is quite probable that the industries located in the

territories acquired by Poland under the Potsdam agreement will,

in general, materially add to the country's export possibilities.

The acquisition by Poland of the River Oder and the port of

Szczecin, plus the rail and canal network of the recovered terri-

tories, has greatly enhanced the prospects of a considerable

transit trade. Even at the present moment transit trade by land

and water is proving a profitable invisible export. In the long

run, prospects are very favorable. If a canal is constructed

joining the Vistula and the Danube, and canals completed in

east-west and north-south directions, a vitally important system

of waterways based on the Oder, Vistula and Danube would be

created. There is no doubt that considerable traffic wiould take

advantage of this network of waterways linking Eastern and Cen-

tral Europe with the Beltio and the North Sea. The development

of this system of inland transport will involve large scale in-

vestments and could not, of course, be completed for many years.

Nevertheless, profits from transit must be expected to assume a

rapidly growing importance in Poland's balance of trade.

- 33 -

Changes in Import Requirements

As in the case of exports, changes in Polish import reauire-

ments are due to two factors. W.ar devastation has created needs

for imports which are of a temporary character while territorial

changes have created permanent changes in the structure of Polish

imports. It is clear that the immediate needs for rehabilitation

will be modified during the next few years and that, gradually,

as all economnic resources are mobilized, the permanent character-

istics of Polish imports will become apparent.

The table below shows developments during the next three

years -

TABIE IX

Polish Import Requirements 1947 - 1949(in million U.S. dollars)

1946 1947 1948 1949

Food 195 136 20 10Other consumption goods 30 7 - -

Total consumption goods 225 143 20 10

Raw materials and intermediateproducts 110 223 300 350

Basic investment goods n.a. 118 275 315Other investment goods n.a. 30 70 lO1

Total investment goods 148 148 345 415

Grand Total 483 514 665 775

Source: Polish National Economic Plan (ProvisionalFigures), Warsaw, 1946 and UNRRA Missionto Poland.

The table shows that, in 1947 as in 1946, consumption goods

(principally foodstuffs) and raw materials are the most important

imports. Tn 1948 and 1949 consumption goods disappear almost

entirely, raw materials increase steadily while investment goods

t.n rpnmane wn.r l 1en, r-nme t1ip arpatpqt. nn-of-. nf impnrt.

- 34 -

requirements.

Only after 1949, when the bulk of the imports of investment

goods should have come in, will the normal structure of irmports

develop. This will consist of a much "larger preponderance of

raw materials and semi-finished products, although the increased

size of the industrial economy will also involve appreciable im-

ports of investment goods for replacement and modernization. In

the case of raw materials in some instances smaller exports will

be required; wherever industry in the ex-German territories was

complementary to industry in the old Polish territories, and

movements of raw materials from one to the other resulted, these

movements will now be eliminated. But in other cases the in-

balance between industrial capacity and raw material supplies has

been accentuated by the transfer of capacity from Germany to

Poland and a more than proportionate increase in imports of raw

materials will be required.

Industrial and Transport Equipment: It seems fairly certain

that the development of the industrial capacity of the important

industrial areas of lower Silesia, the ex-German part of upper

Silesia, and other areas of Eastern Germany with their wide range

of finishing industries, will gradually bring about Poland's in-

dependence from imports of a variety of semi-manufactured and

finished goods. Once production in the western territories

reaches full capacity, Poland might even acquire an exportable

surplus in some of them. On the other hand, the very enlarge-

ment of industrial capacity will create increased needs for in-

dustrial machinery, and for maintenance and renewal items. A

large part of Silesian industry is equipped on old-fashioned

- 35 -

ization, all of which will require equipment which cannot be

produced in Poland over many years to come. On the whole Poland

will thus be dependent on imports for a considerable quantity of

industrial and transport equipment such as modern plant for the

iron and steel and engineering industries, motor vehicles, river

barges and cranes,5 and machines and parts of all kinds.

Petrol and Oil

Before the wiar Poland produced about 507 thousand tons of

crude oil and did not import or export to any extent. In 1946,

however, on account of the loss of three-quarters of her pro-

duction, she had to import just over 300 thousand tons in the

form of final products. The needs of a greatly expanded Polish

industry and a greatly enlarged fleet of motor vehicles has

increased requirements, and there is no doubt that they will

continue to expand. Every effort is being made to expand pro-

duction by drilling new wells, hut the possibilities of expansion

are limited. While Poland has acquired some large German

synthetic oil plants, these are at present in a state of virtual

destruction; even when plans for the re-establishment of the

synthetic oil plant it Oswiecim are realized, domestic output

wrill be insufficient to fill Poland's needs. Petrol, oil, and

lubricants will, therefore, become regular items on Poland's

import list and far exceed the 1946 level of 300 thousand tons.

Raw Materials

The acquisition of the ex-German industry will, of course,

require the importation of larger quantities of raw materials.

Furthermore, in some industries there is now greater lack of

balance between capacity and raw material supplies. Whereas the

capacity of the steel industry has increased by about 50 percent,

- 36 -

iron ore resources have increased by a bare ten percent; heavily

increased imports of iron ore are therefore inevitable.

Similarly, important new woool-combing and other textile

caDacity has been acquired, especially in Lower Silesia, without

any corresponding acquisition of cotton and wool. In the chemi-

cal industry, too, expansion has been mostly on the manufacturing

side without corresponding additions to raw material supplies.

Fertilizers

Poland is certain to be an importer of fertilizers on a

* considerable scale. Although agricultural production per hec-

tare in the western territories exceeded that in the territories

transferred to the U.S.S.R., the soils are relatively unfertile

and output can only be maintained by large applications of fert-

ilizers. Whereas, in old Poland, application of fertilizers per

hectare was about three kilos Qf nitrate, four of phosphates

and three of potash, in the new territories application wras much

larger, namely 18 to 20 kilos of nitrates, 20 to 25 of phosphates

and up to 30 of potash per hectare. As a result, fertilizer

requirements in present day Poland, in spite of a reduction of

one-fifth in its area, will ultimately reach twice the level

before the war. The total requirements will eventually reach

some 250 thousand tons of nitrate, 300 thousand tons of phos-

phates, and 325 thousand tons of potash salts, annually. These

amounts would be required merely to pursue the prewar system of

farming, but the decrease of livestock, brought about by the

war, has greatly decreased supplies of animal manure and, until

the livestock population is rebuilt,needs will be higher.

Although after the year 1947 it is anticipated that domestic

- 37 -

production of nitrates will satisfy requirements there will be

serious deficiencies in phosphates and potash amounting to some

85 thousand tons of phosphates in terms of B203 and 80 thousand

tons of potash in terms of K2 0 annually. It is clear, therefore,

that fertilizers will loom large in Poland's postwar requirements.

The Future Outlook

To sum up, wide scope exists for a general expansion of

Polish foreign trade. The Commodity structure of that trade is

bound to be different from that of the prewar years. Among

exports, coal, zinc and possibly finished industrial products

will be more important than before; timber and fertilizers less

important. Among imports, industrial raw materials, especially

textiles, ore and oil will become more prominent; steel products

and chamicals may recede in importance.

President conditions seem favorable to an expansion of

overseas trade; Poland has acquired a good seaboard and first-

class ports and two important limiting factors of the prewar

period have thus been removed. After its heavy war losses her

merchant fleet is gradually increasing. At the end of the war

it was only some 150 thousand deadweight tons, but as a result1/

of the acquisition of some 80 thousand tons from reparations

plus another 65 thousand tons from new building and purchase, it

1/ According to the Potsdam Agreement and the agreement with theTU.S.S,r . of August 16th, 1945, Poland is to receive 15 percentof the quota collected by the U.S.S.R. from its occupationzone and 15 percent of the reparations collected from thewestern zone of Germany, both free of charge, and in exchangefor deliveries to these zones. In return Poland is to delivereight million tons of coal in 1946, 13 million tons in each ofthe years 1947 to 1950 and 12 million tons per annum there-after throughout the occupation of Germany. All these de-liveries will be at a special price. It was agreed, in March1947, however, that these coal deliveries will now be halved.

- 38 -

is expected that, by the end of 1949, the fleet will be sorne 295

thousand deadweight tons.

Changes in the Direction of Poland's Foreign Trade

Poland's first postwar trade agreements were dictated to a

large extent by transport possibilities, available surpluses on

both sides, and the urgency of the immediate needs of each of the

contracting parties. Ever since liberation, the Polish Govern-

ment has adopted a positive attitude towards the development of

international trade and has shown no desire to put obstacles in

the way of its expansion in any direction. Most continental

countries will presumably continue to trade with Poland roughly

approximately according to the prewar pattern, subject to the

shifts arising out of Poland's ohanged industrial structure. In

particular, the acquisition of a convenient seaboard, the avail-

abilitIy of greater export surpluses of coal, and the greater

needs for imported iron ore should all work in the direction of

increased trade with the Scandinavian countries,

In the trade with Germany, the U.S.S.R., the U.S.A. and

with the U.I,, however, some more fundamental changes are

apparent.

Germany: As a result of the changed economic structure of both

countries resulting from territorial changes, Germany's share in

Poland's trade is likely to be far less than before the war.

Agreements concluded in August 1945 and February 1946 provide

for the resumption of trade to the extent of about 21 million

U.S. dollars with the U.S.S.R. Occupied Zone. The commodities

imported into Poland included fertilizers, synthetic rubber, oil

and chemical products, thus reflecting the changes in the commod-

ity structure of Polish imports discussed above; in return,

- 39 -

Poland exported coal, coke, benzol and naphthaline.

As for the future, it seems likely that Poland will export

manufactured products and coal to Germany. lWhat Germany could

sunply in return will depend upon the character of Germany's re-

constructed economy, but the bulk of the exports are certain to

be raw materials and semi-finished products. The commodities

included in the Polish-German eastern zone agreement provide at

least an indication of the type of articles likely to figure in

the German exports from this zone. As regards the western zone,

there is no doubt that German industry in the past supplied

Poland with an appreciable proportion of its industrial equipment;

the extent to which such imports could be resumed will depend

upon allied policy regarding the re-establishment of German

engineering and manufacturing industries. It would seem likely

that, if there is to be any solution to the present economic

crisis in Germany,such production will be expanded, and Poland

might well receive a part of the output.

U.S.S.R.

One of the most important new features in Poland's foreign

trade is the emergence of the U.S.S.R. as one of Poland's leading

trade -artners, although the abnormal emergency aspect of this

trade in the months during and after liberation must be emphas-

ized. Apart from UNREA imports, which were very small in 1945,

trade in that year with the U.S.S.R. accounted for over 90 per-

cent by value of Poland's total foreign trade. It should be

remembered that trade with the U.S.S.R. began before the end of

hostilities when the Polish Government was still cut off from

contacts with the west and at a time when conditions in the

country wrere chaotic. At that time, the problem facing the

- 40 -

Polish Government was not so much that of obtaining supplies on

favourable terms, as that of getting any supplies at all. Apart

from the U,S,S.R there were no alternative sources for such ess-

enti2al commodities as iron ore, wool, cotton and patrol. Equally,

no country but the U.S.S.R. was in a position to take delivery

of coal from Polish pitheads (practically the only export which

Poland had to offer in exchange) in its own transport at a time

when Polish railway transport was practically non-existant.

These extraordinary circumstances still persist, though to a

lesser degree, and they should be borne in mind when reviewing

the long-run prospects for Polish-Soviet trade.

The importance of the U.S.S.R. in Poland's foreign trade

should not be over-estimated. In 1946, 69 percent of all Polish

imports were provided by UNRRA, Which consequently was the great-

est single source of Poland's imports; the contribution of the

U S.S.R. to UNRRA supplies was, of course, small, the bulk being

supplied by North and South America and the British Empire. At

the same time, it should be remembered that 201 million dollars

out of the total UNRRA program of 481 million dollars was supp-

lied in the form of food and these are imports which will soon

disappear entirely. Furthermore, the share of the U.S.S.R. in

normal foreign trade is diminishing, it fell from over 90 percent

in 1945 to 57 percent in 1946. As other means of financing

Poland's rehabilitation are found, the share of the U.S.S.R. in

normal foreign trade will diminish even further. Nevertheless

it will remain a very important factor. The Soviet Union is the

nearest source of textile raw materials, hides, furs, fertilizers,

petrol, manganese ores and timber, all of which Poland needs

urgently. If the cost of overland transport can be kept at a

- 41 -

reasonable level, the U.S.S-R. may also prove the cheapest -ource

of supply. On the other hand, the U.S S.R. too will be hard

pressed by the enormous tasks of reconstruction, repair and fur-

ther industrialization which confront it, and Poland cannot look

to the U.S,S.R. for much of the capital equipment required for

reconstruction of industry. The fouldations at least for mutu-

ally satisfactory trade in good volume are clearly present,

though Poland's great needs for industrial and transport equip-

ment mean that, in the next few years, the proportion of her im-

ports received from the U.S.S.R. will rapidly diminish.

The United States

The development of trade between Poland and overseas coun-

tries is a difficult problem at the present time. There is no

doubt that, owing to the disappearance of Germany as a source of

industrial equipment, Poland requires imports from these coun-

tries on a very large scale. She requires industrial raw mater-

ials, such as raw textiles and rubber, and industrial equipment

for rehabilitation of industry and transport. The problem,

however, is to find means of paying for these imports. UNRRA

has enabled Poland to obtain roughly 481 million dollar's worth

of such supplies without making any corresponding exports, but

with the demise of UNRRA it will be impossible to finance these

imports, since Poland is not in a position to supply goods or

services which are required by overseaa countries. Thus, her

prewar exports of timber and food, which provided her with the

free exchange for overseas purchases before the war, are no

longer available in any volume. Coal, which she can export in

large quantities, could not be exported to distant overseas

countries on account of transport costs. Until her food pro-

- 42 -

duction increases to the extent necessary to permit her to resume

exports of highly processed foods, or until she can find other

products which she can produce and sell to those countries, she

will, therefore, be confronted with this difficulty of financing

imports from overseas.

The United States will undoubtedly have to supply the major

part of the capital equipment required for Polish industry and to

this extent will become of major importance in Polish foreign

trade during the next few years. Poland also requires supplies

of raw cotton, and a long list of other items from the U.S.

These imports will, at least in the short period, have to be

financed out of credits, although, when food production recovers,

there will, no doubt, be a market in the United States for high

quality Polish hams, fruit, mushrooms etc., as well as for

Polish handicrafts and perhaps glassware and china. Although the

United States will become a major supplier of Poland's imports,

her imports from Poland will never become very important. Apart

from credits Poland must rely largely upon obtaining foreign ex-

change from her exports to other countries in order to buy in

the United States.

The United Kingdom

The United Kingdom produces much of the capital equipment

that Poland requires to rebuild her industry. However, owing to

the devastation of Europe and the needs of British industry,

possibilities of Poland Dlacing orders in the U.K. are limited.

There is no doubt, however, that in the long run, Britain can

again provide Poland with large quantities of manufactured pro-

ducts. In this case the long period prospects of foreign trade

are very favorable since the U.K. will be a market for Polish

- 43 -

food, zinc, cement, and chemicals on a considerable scale.

Other Countries

Poland will also require, in the long run, considerable im-

ports from distant overseas countries in the form of tropical

products and raw materials. She has already entered into comm-

ercial relations with the Argentine, Brazil and the Wear East.

Exports to these countries could take the form of zinc, iron and

steel, chemicals, glassware, china and possibly finished textiles.

IV. FOREIGN TRADE SINCE LIBERATION

After liberation Poland commenced the tremendous task of

rehabilitating and reconstructing her economic life. Of necess-

ity the bulk of the materials and equipment for this purpose

had to be found within the country, but there existed extensive

needs, including those required to repair the great devastation,

which could only be met by importing on a large.scale. At the

same time there was, of course, the urgent need for imports

of food and clothing to feed and clothe the Polish population

0 during the emergency period immediately following the war. It

was obvious that the complete dislocation of transport would

impose most serious limitations upon the extent of imports from

other countries, and, in the early stages, imports had therefore

to be restricted to food and clothing to most relief needs, and

transport material to enable Poland to rebuild the transport

system as rapidly as possible. During the year 1945 foreign

trade, even including UNRRA supplies, was very small in volume;

as a rough estimate, the volume of imports in 1945 reached only

some 30 percent of prewar levels. During 1946, however, the

internal transport situation, and the port facilities, improved

rapidly, and trade expanded to nearly four times the level in

- 44 -

1945. During this year the importance of imports outside UNRRA

supplies increased considerably, and the foundations were laid

for normal foreign trade.

Exports throughout the two years remained at a very low

level; they would have been far smaller had it not been for the

large coal exoorts which were made possible by the acquisition of

ex-German mines. Naturally, the development of exports was poss-

ible only as industry was rehabilitated, and during the rhole of

1945 and 1946 imports were some three and three quarters times as

great as exports. This excess of imports over exports was a

symptom of the relief and rehabilitation needs of Poland and the

fact that she could not pay for her imports with exports; it

made possible relief of hunger and immediate essential investment

in both agriculture and industry. This situation wrill persist

throughout the whole of the four year plan. Though the need for

emergency food imports will disappear after the 1947 harvest, the

needs of industry and transport will more than counterbalance the

disappearance of food needs, and necessitate further overseas

investment on a large scale.

It was obvious that, in the first months after liberation,

the bulk of Poland's imports would have to come from UNRRA, which

set up a program of some 481 million U. S. dollars. During 1945

UNRRA imports were twio and three-quarters times as great as other

imports. Voluntary Societies also commenced operations in Poland,

which although not on so large a scale as UNRRA provided several

million dollars during 1945. Ow^ing to the fact that the U.S.S.R.

had gradually liberated the country from the East, trade with the

U.S.S.R. was naturally the first to recover after the war; during

1945 it accounted for 93 percent of the normal foreign trade.

- 45 -

Poland speedily tackled the problem of resuming normal trade

relations with the rest of the world. Naturally, her first att-

empts were directed towards Scandinavia and the Balkan countries

because her exports consisted mainly of coal and coke, which are

very costly to transport, and transport facilities governed the

direction of her foreign trade. During 1946 trade agreements

were concluded with 17 countries, covering almost every country

in Europe. Although normal trade was thereby expanded to four

times the 1945 level, the UNRRA imports were again the predominant

factor in foreign trade and were 70 percent greater than other

imports. The share of the US.S .R. in normal trade fell to

some 57 percent of the total trade.

Commercial Agreements

Some of the postwar changes in the organizatinn of Poland's

foreign trade were described in a previous chapter of this paper.

The greatest change, however, is the predominant part played by

trade agreements in Poland's foreign trade. The reasons for

this method of trading are shortage of foreign exchange, Poland's

surplus of coal, Poland's urgent needs for certain vital raw

materials, and transport difficulties. Having no reserve of

foreign exchange at her disposal, and in view of the currency

restrictions which prevail in most parts of the world, Poland

was forced to make individual agreements regarding the commod-

ities to be imported in exchange for her exports. In view of the

European coal shortage, she found herself in a favorable position,

through her coal exrorts, which were vital to industry in many

European countries. to insist upon receiving certain raw materials

essential for the resumption of industrial activity. Finally,

transport difficulties restricted her exports to neighboring

-46-

countries and, as most of these wlere in a similar position to

Poland with respect to devastation anid foreign exchange, she was

compelled to enter into barter agreements with her neighbors.

Thus the trade agreements which Poland had concluded since the

end of the war follow the same general pattern of barter

compensation,

The main principles by which they are governed are:-

1. The quantities of each commodity to be delivered

by each party are specificallyr listed in the

* agreement

2. The commodities to be exchanged must balance in

value at world market prices

3. There are no cash payments between the contracting

countries5 the settlement of accounts being

effected by entries in the books of the res-

pective National Banks. Amounts due for goods

supplied are paid by each National Bank to the

supplier in national currency

4. Prices and other terms and conditions of sale are

negotiated by Government organizations, or by

private corporations or firms in each country,

subject to the approval of their respective

Governments

5. Execution of trade agreements is controlled by

mixed commissions composed of representatives of

each country

6. Both Governments collaborate in providing the

necessary transport and transit facilities

- 4I7 -

Some deviation from the original, pure barter character of

these agreements takes place in the agreement with Sweden.

Sweden granted Poland a credit of 100 million Svwedish kroner

which will be gradually repaid as Polish exports to Sweden are

developed. The Agreement also provides that Poland will receive

"free" currency for about one-half of her exports, thus enabling

her to use this for purch4seS in other countries.

The trade agreement with Switzerland provides for a credit

of 40 million Swiss francs, as an advance on Polish exports of

coal, to be spent in Switzerland. Since these exports will ex-

tend over a period of over a year - until the end of September,

1947 - the arrangement gives Poland the possibility to order

urgently needed imports immediately. The agreement also provides

that when Polish coal exports to Switzerland will have reached a

total of 20 million Swiss francs, a further credit of 40 million

Swiss francs will be opened. Similarly, credit clauses are in-

eluded in the agreements with France, Denmark and Italy to enable

Poland to place orders for goods vwhich cannot be delivered

* immediately.

All the trade agreements which Poland has concluded after

liberation are listed in the following table. This shows that,

by the end of 1946, agreements vwere concluded with 17 countries

for a total trade turnover of 830 million dollars. These trade

agreements would be sufficient to provide Poland with imports

valued at 415 million dollars, though, in many cases, delivery

is still going on and will only be completed during 1947.

48

TABLE X

Poland's Trade Agreements Concluded after Liberation

Values as Expressed Value inDate of in the Agreement iViillion

Country Agreement (Imports plus Exports) US Dollars

U.S.S.R. July, 1945 190 million gold zloty 59.00July, 1945 595 million gold zloty 186.00April, 1946 192 million US dollars 192.00

Sweden August, 1945 440 million Swmedish kroner 10000Denmark Augusti', 1945 54 million Danish kroner 11,25

October, 1946 258 million Danish kroner 53.75Italy October, 1946 1560 million Italian lire 40*00France July, 1946 34 million US dollars 34.00Switzerland March, 1946 146 million Swiss francs 34.00Norway August, 1945 11 million US dollars 11.00

December, 1946 90 million Norwegian kroner 22.00Germany - SovietZone February, 1946 20.5 million US dollars 20.50

Bulgaria April, 1946 14 million US dollars 14.00Holland December, 1946 45 million Dutch florins 17.00Hungary October, 1946 1.26 million US dollars 1.26Czechoslovakia May, 1945 5,4 million US dollars 5.40

April, 1946 68 million US dollars 68.00Austria September, 1946 7.27 million US dollars 7,27Jugoslavia January 1# 1946 2.5 million US dollars 2.50

August, 1946 4.0 million US dollars 4.00Belgimn August, 1946 6 million US dollars 6.00Finland Julys 1946 3.4 million US dollars 3,40Iceland December, 1946 1.75 million US dollars 2.00

TOTAL 894.33

Source: Polish Ministry of Navigation and Foreign Trade,War sawv

/ Excluding the agreement of August 16th, 1945, with the U.S.S.R.regarding reparations. These agreements include only thosesigned up to the end of December 1946. Since that date thefollowing agreements have been signed:1. Soviet Zone of Germany, February, 1947, Imports 7.15 million

dollars, Exports 7*01 million dollars2. Finland, March, 1947, Exports 495 thousand tons coal* equi-

valent imports.3. Czechoslovakia, March, 1947, 200-300 million dollars imports

and equivalent exports over a five year period.4. Norway, February, 1947, Imports 66.32 million Norwegian

kroner, exports 44.94 million Norwegian kcroner, Good credit4 million kroner.

5. Uolland, February, 1947, Imports 155 million Dutch florins ,exports 155 million Duteh florinso

-49 -

Since transport difficulties are one of the main bottlenecks

in Polish foreign trade, special transport provisions are in-

cluded in many of the new agreements. Goods exchanged with the

U.S.S.R. are mainly carried by Soviet trains on the broad gauge;

Sweden has sent Poland some railway trucks and locomotives and

has recently organized communications by ferry; finally Switzer-

land and some of the Balkan countries have undertaken to carry

all goods exchanged in their own railwray freight cars.

The conduct of foreign trade through trade agreements must

be regarded as a necessity arising out of the special circum-

stances existing at the end of the war. At the same time consid-

erable trade has been carried on outside the trade agreements,

and this should grow progressively as economic conditions

throughout the viorld recover. VVhile it is clear that trade

agreements will continue to be an important feature of Polish

foreign trade, particularly in her commercial relations with

other planned economies, in the long run normal trading will

occupy a much more important position.

Appendix I summarizes the nature of the trade under each

agreement and its approximate value.

Prices and Vaelues

In analyzing the revival of Poland's foreign trade in the

immediate postwar period, one of the major difficulties is the

correct assessment of its value. In the official valuation supp-

lied by the Polish Government import and export values are ex-

pressed in postwar zlotys. This valuation represents the amounts,

in zlotys, received by the exporter or paid by the importer.

The export prices represent the current prices fixed by the

Ministry of Industry for industrial products and by the Ministry

- 50 -

of Navigation and Foreign Trade in agreement with the exporter

for other products. The price in zlotys of imported commodities

is determined by the Economic Committee, which works on the

principle that the price should correspond to the price prevailing

on the internal controlled market. An over-riding principle is

that, taken. together, the value of imports in zlotys should equal

the amount paid to exporters. In general, therefore, the zloty

values of imports and exports are made to conform with the price

structure of the controlled sector of the Polish economy, where

much lower prices and wages prevail than in the free market

sector.

To be comparable writh prewar or other trade data trade

statistics must be converted into dollars or pounds in such a

way as to express the true exchange value of the commodities

concerned. Neither the official rates of exchange between the

Polish and other currencies (100 zlotys 3 1 dollar) nor the black

market prices of the latter (which have, on occasion, reached

1,000 zlotys per dollar), however, provide a completely satis-

factory basis of comparison. Moreover, Poland was cut off so

effectively from the outside world for so many years that both

the general level of prices (if such a concept has any meaning

in an economy where some prices are fixed and others uncontrolled)

and the price relationships of different goods one to another

are quite unconnected with price levels and price relationships

in the world market.

To illustrate the problem we may consider coal exports,

which, in zloty value, accounted for 48 percent of all exports

in 1946. A total of 8.69 million tons was exported, valued at

only 5,115 million zloty. The average price of a ton of coal, in

- 51 -

Polish Government statistics, is thus about 590 zloty per ton.

The world market price is about ten dollars per ton. Thus the

rate of exchange for Polish coal is about 59 zloty per dollar.

In the case of other exports the exchange rate is about 140 zloty

per dollar. In the following analysis of Poland's foreign trade

since liberation, whenever possible comparisons are made on the

basis of zloty values, since this eliminates the problem of a

true exchange rate. In other cases comparisons are made on the

basis of world dollar values of the goods entering into the

foreign trade.

Trade in 1945 and 1946

IJNRRA supplies to Poland were specifically for relief and

rehabilitation and were designed to assist the country to resume

its normal economic life. They were not of the same character as

other imports and should not, therefore, be considered in any

discussion of Poland's progress in re-establishing normal foreign

trade. In order to examine the development, during 1945 and

1946, of Polandts postwrar pattersn of foreign trade, we will, for

the moment, disregard UNTRRA imports.

It should be borne in mind, vwhen considering postwar

recovery, that the prewar basis used in the following analysis is

given merely for purposes of comparison and that, as a result of

territorial changes, Polish imports and exports should, in the

long run, far exceed prewuar levels. In 1937 and 1938 exports (at

prices ruling in those years) amounted to some 225 million doll-

ars, wqhile imports totalled some 241 million dollars. The follow-

ing table shows progress in 1945 and 1946 towards overtaking this

prewar level. Although the figures are approximations, they

indicate the order of magnitude of the trade Poland has been able

- 52 -

to transact vwith other countries during the first two years

following liberation. It is clear that, imports and exports

within trade agreements approximately balance; the determining

factor in these imports so far has been the extent of exports.

In 1945 exports were on a very low level and reached only some

ten percent of prewar levels. Even if we exclude exports of

food, which were impossible immediately after the war, exports

rere only some 14 percent of the prewar level. In 1946, however,

rehabilitation was progressing at a much faster piace and exports

expanded to some three and a quarter times the 1945 level,

reaching about one third of the prewar level. Excluding food,

the percentage was 45 percent. If the 5.5 million tons exported

to Russia under the trade agreement of August 16th, 1945, are

included, exports were about 180 million dollars in 1946, about

45 percent higher than the figures quoted below and nearly half

of prewar exports.

TABLE XI

Polish Foreign Trade in 1945 and 1946 1/

(in million U.S. dollars at 1946 prices)

1937/38average 1945 1946

Exports 375 38 126

Importsnormal trade 400 34 139

UNRRA imports - 92 306

Other imports / 38

Total 400 126 483

1/ These statistics exclude coal exports to Soviet Russiaspecified in the trade agreement concluded on August 16th,1945 because such exports are part of the reparationssettlement betwreen Poland and Russia. Poland was to

(Footnotep continued next page)

- 53 -

deliver eight million tons of coal in 1946 (valuedat about 80 million dollars), but actually only 5.5million tons were so delivered, valued at about 55million dollars.

2/ Reparations and imports financed from the creditsraised in the United States. which together total38 million dollars.

Source: UNRRA Mission to Poland

For 1947 prospects are much brighter; it is estimated that exports

will rise to some 298 million dollars, which represents an in-

crease of 135 percent above the 1946 level. This level of ex-

ports is 80 percent of the prewar volume. Exports other than

food will be about ten percent greater than prewar levels, This

rapid revival to prewar levels of export will be achieved largely

by an expansion of coal exports to 20 million tons, which alone

will account for two-thirds of the total value of exports.

Owling to the termination of UNRRA activities during 1947,

imports will depend upon Poland's success in obtaining credits

from abroad, but assuming she is successful in this aim her im-

ports should greatly exceed exports this year. Assuming the

0 economic plan is achieved, imports will amount to 510 million

dollars, an excess of 212 million dollars over exports, and 27

percent higher than prewar. By 1949 imports will be over 90 per-

cent greater than before the war, while exports will be about

30 percent higher. On a per capita basis imports will be 180

percent greater and exports 90 percent greater.

Table XIII shows the development of trade in 1945 and 1946

according to countries. This shows the preponderance in Poland's

trade (excluding UNRRA imports) of the U.S.S.R. In 1945 the

U S.S.R. accounted for 93 percent and in 1946 for 57 percent of

the total trade turnover. At the same time the Scandinavian

countries are increasing relatively in importance, their share

- 54 -

increasing from seven percent in 1945 to 21 percent in 1946. Of

this most of the trade is with Sweden. The table shows clearly

how trade has expanded in 1946 to include the Balkans, Czechoslo-

vakia5 France and Switzerland. Trade with the United Kingdom and

the United States is developing only slowly, due to the fact that

these two countries have not as yet entered into trade agreements

with Poland. However, it should not be forgotten that Poland was

able to obtain supplies from these two countries, including in-

dustrial raw materials and equipment, through the UNRRA program.

An interesting feature of Poland's foreign trade is the

fact that she is building up credits in many countries. During

1946. although her imports slightly exceeded her exports by 845

thousand zlotys, or eight percent, at the same time she built up

debit and credit balances as follows:-

TABLE XII

Excess of Imports over Exports Excess of Exports over Imports(in thousand zlotys)

U.S.S.R. 1,880 Sweden 666Zone of Germany 262 France 386

Czechoslovakia 331 Denmark 295Hungary 156 Norway 211United States 126 United Kingdom 177Rumania 80 Switzerland 110

Source: Ministry of Navigation & Foreign Trade,Warsaw.

Her greatest debit balances are with the U.S.S.R., Czechoslovakia

and the Soviet Zone of Germany.

During 1946 imports from the U.S.S.R. exceeded exports by

nearly 40 million dollars, though it should not be overlooked

that this ignores the 55 million dollars exports in the form of

coal under the August 1945 agreement. Taking all other countries

together, exports exceeded imports by some 25 million dollars or

about one percent of the Polish National Income. This was

- 55 -

Poland's contribution in 1946, to the rehabilitation of Europe.

In the latter months of 1946 the excess of exports over imports

to these countries was even greater and amounted to two percent

of the national income.

TABLE XIII

Polish Foreign Trade in 1945 and 1946

(in million zlotys)

I m p o r t s E x po r t sCountry 1945 1946 1945 1946

U.S.S.R. 1,580 7,271 1,8840 5,392

U.S.S.R. Zone of Germany - 816 - 554

Scandinavia: 167 1,742 85 2,954of wprhich: Sweden (99 (1,356) (7) (2022

Denmark (311 (261) (41 (556)

Balkans: 1 521 8 284of which Hungary 1 (261) (6) (104)

Czechoslovakia - 718 - 387

France _- - 387

Switzerland - 150 - 260

United Kingdom - 88 - 265.

United States - 162 - 35

Other countries - 75 - 112

Bunkers - - - 69

TOTAL 1,748 11,544 1,933 10,699

Source: Ministry of Navigation & Foreign Trade, WNarsaw

- 56 -

TABLE XIV

Poland's Imports in 1945 and 1946

In Thousand Tons In Million Zloty1945 1946 19)45 1946

Food, Drink and Tobacco 34 548 477 4,881of vwhich: Grain and

Pulses (29) (490) (133) (3,119)

Fertilizers 15 137 12 411

Raw Materials: 214 1,176 821 2 947of which: Iron Ore (233) (980) (57) 21

Scrap Iron (-) (10 (-) (151Manganese &Chrome Ore (36) (52) (36) (73)

Non-ferrousmetals (0.5) 2) (113) (222Rubber (0.3) 2) (17) (308)Wo ool ) 1) ) (358) (81)Cotton ) (19) (37) ) (1,446

Oil &. Petroleum Products 36 190 2/ 218 1,526

Manufactured Products 15 4 231 699

Miscellaneous 2 11 1,080

TOTAL 416 2/ 2,066 1,747 11,544

1/ Not including machines

2/ Not including 184 thousand cubic meters of natural gas

Source: Ministry of Navigation and Foreign Trade,Warsaw.

- 57 -

TABLE XV

Poland's Exports in 1945 and 1946 /

In Thousand Tons In Million Zloty1945 1946 1945 1946

Coal and Coke 3,629 8,690 1,21499 5,115

H " t "By-products - 45 - 297

Electric Current - - 355

Raaw Materials: 101 496 288 1,771of which: Iron & Steel (30) (78) (189) (658)

Zinc & Zincproducts (8) (35) (56) (546)

Lead (- (4) (-) (70)* Cement (55 (379) (36) (379)

Manufactured products: - 68 496 2,280of whi6h: Textiles - 50 (452) (2 1073

Glass Products - (8 (8) (172)

Food - 10 - 693of wrhich: Sugar - (9) - (670)

Miscellaneous 11 - 188

TOTAL 3,730 2/ 9,320 1,933 10,699

1/ Excluding deliveries to the U.S.S.IR. under the agreementdated August 16th, 1945.

* 2/ Not including textiles and glass products.

Source: Ministry of Navigation & Foreign Trade, Warsaw.

In Tables XIV and XV the foreign trade of Poland is broken down

according to the main commodities entering into it. Amongst

her imports food, drink and tobacco, which accounted for 42 per-

cent in 1946, occupy the first place, with raw materials second

and petroleum products third. Food showed a great expansion in

1946 and should continue to play an important part in 1947, but

apart from tropical foods, slMuld disappear in 1948. Amongst

raw materials, the most important by value are cotton, iron ore,

rubber and non-ferrous metals.

Table XV shows the importance of coal and coke in exports;

- 58 -

though their relative importance is decreasing as industry is

rehabilitated they expanded by more than 250 percent in 1946.

In 1945 they accounted for some 75 percent, and in 1946 for 48

percent of exports. Exports of other raw materials have expanded

even more rapidly as industry has been rehabilitated, zinc and

zinc products, lead and cement being the main items. 21 percent

of total exports are accounted for by manufactured products.

Food was exported on a very small scale and was almost entirely

accounted for by exports of sugar. It should be noted that this

table excludes the delivery of 5.5 million tons of coal, valued

at about 3,250 million zloty, to the U.S.S.R. under the agreement

of August 16th 1945.

Table XVI compares the principal imports and exports before

and after the war, including only those obtained through normal

foreign trade and excluding the large UNRRA imports. It is clear

that imports of textiles are much lower than before the war;

imports of raw cotton, for example, are less than half of prewar

levels, and imports of raw wool, hides and skins, less than five

percent of prewar. Owing to the large quantities of scrap iron

available within the country the large prewar imports of scrap

iron have, as yet, hardly been resumed. On the other hand,

imports of iron ore and manganese and chrome ore are running at

a level about 15 percent above prewar, and imports of petroleum

products, due to the loss of domestic resources, are also on a

much higher scale. In the export field normal exports of coal

and coke are now running about 75 percent of prewar although if

5.5 million tons delivered to the U.S.S.R. under the trade agree-

ment of August 16th, 1945, are included, they are 25 percent

above prewar levels. Exports of iron and steel products, how-

- 59 -

ever, are less than one-third of the prewar level and exports

of zinc and zinc products about one half. Cement exports

greatly exceed prewar levels as do exports of textiles, which

are seven times the prewar volume. The biggest single loss in

exports is in food; only some ten thousand tons were exported

in 1946 compared with over 600 thousand tons before the war.

TABLE XVI

Polish Imports and Exports Pre and Postwar

(in thousand tons)

1937/38average 1945 1946

Imports

Raw Cotton 79 ) 37Rawr Wlool 25 ) 1Raw Hides and Skins 29 1Scrap Iron 535 - 10Iron Ore 658 233 980Manganese and Chrome Ore 78 -5 52Petroleum Products - 36 190

Exports

* Coal and Coke 11,333 3,629 8,690Iron, Steel, and Products 266 30 79Zinc and Zinc Products 69 8 35Lead 0.16 - 4Cement 37 55 379Textiles 7 _ 50Food 604 10

1/ Excluding 5,5 million tons delivered to the U.S.S.R. underthe trade agreement of August 16th, 1945.

Source: Concise Statistical Year-Book of Poland, London1944, and Ministry of Navigation & ForeignTrade, Warsaw.

- 60 -

Foreign Trade & UNR1A Imports

Poland has re-established her normal foreign trade to a

considerable extent during the first two postwar years. We have

seen;, however, that these imports consist predominantly of in-

dustrial raw materials, vwith very small quantities of foodstuffs,

other consumer goods and the necessary capital equipment for the

reconstruction and re-equipment of the country's agriculture and

industry. Because of the greatly inflated needs following the

waitime devastation in Poland, imports through normal channels,

aithough equal to about half of the prewrar volume, would have

been completely inadequate to enable Poland to feed her populat-

ion and commence the rehabilitation of her agriculture and

industry.

This vital gap in Poland's import needs was filled by UNRRA,

which brought in large quantities of food, olothing, and medical

supplies for the immediate relief of the Polish people and in-

dustrial and agricultural rehabilitation supplies to help rebuild

their shattered farms and industries. -Table XVII describes the

UNRRA program in detail.

As this table shows, food accounted for 42 percent of the

total program. A further nine percent represented clothing and

another 5%- percent represented medical supplies. Thus 271.5

million dollars, or about 55 percent of the total program, con-

sisted of relief items which in normal years would not be of much

importance in Poland's total imports. The remainder of the pro-

gram, some 210 million dollars, represents imports which were

vital for Poland's agricultural and industrial rehabilitation.

This 210 million dollars wras divided almost equally between

transport (65 million dollars), industry (69 million dollars)

- 61 -

and agricultural rehabilitation (76 million dollars).

After liberation Poland needed food, clothing, means of

transport and industrial equipment at once. Even if these

imports had been available from other than UNRRA sources, which

is doubtful, Poland could not have waited until it had sufficient

foreign exchange to pay for them. Any delay would have caused

widespread starvation and would have prevented the re-establish-

ment of transport and of agricultural and industrial production.

The timing of UNRRA imports into Poland is set out in

Table XVIII in order to show the emphasis on relief items in the

early stages of the program, and the subsequent emphasis on

agricultural and industrial rehabilitation supplies.

- 62-

TABLE XVII

UNRRRA Frogram of Operations for Poland

(estimated values in thousands of U.S. dollars)

Food Value Clothing and Textiles Value

Grain and Grain Products 34,370 Finished Clothing 22,300Meat & Meat Products 35,260 Blankets and Comforters 2,440Fish 13,090 Cotton Textiles 1,380Dairy Products 29,840 Woolen Textiles 10,290Fats, oils and soap 29,340. Cotton Yarn 40Sugar 230 Woolen Yarn 1,130Pulses 2,540 Raw Cotton 14,490Vegetables 200 Ravw Wool 18,040Beverages 4,360 Footwear 7,470Fruits and Fruit Produots 1,010 Upper Leather 800Soup Dehydrated 3,360 Sole Leather 1,150QM Food 28,800 Hides 440Other Food 730 Miscellaneous Textiles 1,090Animal Feeds 360 Miiscellaneous Footwear 840Red Cross Packages 2,320 MaterialsMIilitary Surpluses 1,190 Unclassified 800Unclassified & Unprogramed 14,520

TOTAL 201,520 82,700Medical Supplies 25,800

Agricultural Rehabilitation

Bagging 2,140 Transport & Telecoomunioations 58$280Farm Machinery 14,860 Public Utilities 2,920Fertilizer 5,400 Building Repair Equipment 2,820Fishing Equipment 4,800 Mining and Quarrying 7X170Food Processing Equipment 360 Machine Repair 4,900Livestock 31,400 Fuels and lubrioants 7,590Pesticides 160 Processing Equipment 1,040Repair Materials & Rand Tls 1,310 Materials Chemicals andSeeds 10,960 Engineering Stores 9,660Dairy & Poultry Equipment 1,450 Unclassified 960Veterinary Supplies and

Harness 2,520 TOTAL 95,340Agricultural Education 540

75,900

Grand Total 481,260 dollars

Source: Operational Reports, UNRRA Bureau of Supply, Washington.

- 63 -

TABLE XVIII

UNPRA Programs and other Imports 1947-1949

In Million U,S. IDollars

Year 19461945 lst End 3rd 4th 1946

Qtr. Qtr. Qtr. Qtr. Total 1947UNRRA Supplies - -

Food 29,9 24.0 57.0 42.0 14.0 137.0 34,6Clothing & Textiles 32.5 23.4 19.8. 1.2 4.6 49,0 1,2Medical Supplies 8.7 5.6 0.7 0.3 0.4 7.0 10.1Agricultural

Rehabilitation 8.4 8.0 21.7 18.5 6.8 55.0 12.5Industrial "

(inol. Transport) 12.4 16.5 23.0 10.5 8.0 58.0 25.0

TOTAL 91.9 77.5 122.2 72.5 33.8 306.0 83.4

Other Imports 1/ 34.1 16.9 37.4 39.5 45.0 138.8 430.6Total Iaports 1/ 126.0 94.4 159.6 112.0 78.8 444.8 514.0Percent of all

Imports suppliedby UIRRA 73 82 76 65 43 69 16

1/ Exoluding reparations and imports'financed from U.S. Creditstotalling 3U million dollars.

Source: Ministry of iKtavigation & Foreign Trade, Warsaw, and U1U?A-= ~. Mission to Poland

The above table indicates that, in the year 1945, in spite of a

late start - the agreement with Poland was only signed on

September 14th, 1945 - TJNRRA supplied three-quarters of the total

imports arriving in Poland during the whole of that year. Food,

clothing, medical supplies and transport equipment formed the

bulk of the supplies in this early period. In subsequent months

UNRRA imports expanded in volume, reaching their peak importance

in the first quarter of 1946, when they totalled 77.5 million

dollars and accounted for 82 percent of the total imports. The

peak deliveries were made in the second quarter when 122 million

dollars were imported. During the whole of 1946 UNRRA imports

totalled 306 million dollars and accounted for 70 percent of the

- 64 -

total imports delivered in Poland that year. The amount of the

UNRRA program which remains to be completed in 1947 is 83.4

million dollars. Of this, 34.6 million dollars is in the form of

food. a figure which has been increased to the fullest extent

during the first months of 1947 in order to help meet the food

crisis which is bound to develop during the spring and summer

months. Another 37.5 million dollars represents agricultural and

industrial rehabilitation supplies, whose delivery has been de-

layed on account of procurement and manufacturing difficulties.

*10 million dollars will be in the form of medical supplies, a

program which has also been delayed through procurement diffi-

culties.

During the year 1947 UNRRA's importance will diminish

greatly, in this year, if the import program is realized, UNRRA

supplies will represent only one sixth of the total imports.

Having described UNRRA's contribution to Poland's foreign

trade during 1945 to 1947, we may now take into account both

normal trade turnover and UNRRA imports and compare Poland's

imports with those of prewar years. At present prices prewar

imports were running at about 400 million dollars per annum. As

may be seen from the above table, total imports in 1945, in spite

of the devastated condition of the country and the urgent need

for imports amounted to only 126 million dollars, less than one-

third of the prewar level. In 1946, however, the total imports

from all sources were 483 million dollars, some 20 percent

greater than in prewar years; nevertheless this level of imports

was sufficient only to maintain a bare subsistence level of

nutrition and was far below the import requirements necessary for

rapid industrial and agricultural rehabilitation. It is inter-

- 65

esting to note that, in the year 19475 the new import program

draim up by the Polish Government represents only a six percent

increase over the level of imports actually achieved in 1946, in

spite of the fact that industrial and agricultural rehabilitation

is noW expanding rapidly. In this year the sharp reduction in

UNRRA supplies from 306 to 83 million dollars will have to be

made up by imports paid for from other sources.

Summing Up

In summing up this brief analysis of Poland's postwar

foreign trade, the following points may be made:

1) Territorial changes and the economic plan of recon-

struction call for imports on a considerably larger

scale than before the war during the next three

years. Furthermore, they mean that in the long

run imports and exports of postwar Poland will be

greatly in excess of prewar levels.

2) Poland's foreign trade relations are reviving

rapidly. If calculated on a per capita basis,

the value of Poland's annual trade turnover,

excluding UNRRA supplies, is now 50 percent of

the prewar level Which, however, was low.

3) Poland's foreign trade has become less one-sided.

Trade relations are being established with a

number of countries and commodities exchanged

are becoming more varied.

4) Commercial (that is, non-UNRRA) imports show a

high proportion of raw materials; this paitly

results from the fact this type of commodity is

available in the countries with which trade

- 66 -

relations have been established thus far.

5) Foreign trade so far is based mainly on barter,

and with the exception of the trade agreement with

Sweden does not provide Poland with any free

currency which could be used for imports from

elsewhere.

6) UNRRA thus far has played the predominant role

in Poland's imports by providing the major part

of them, by supplying goods not available under

existing trade agreements, by furnishing supplies

free of charge, and by delivering them at a consid-

erably faster rate than would have been possible

through ordinary commercial channels.

V. POLAND'S TRADE PROSPECTS FOR 1947-49

It has already been explained, in an earlier chapter, that

wartime destruction in Poland was on so vast a scale that, even

if all the necessary materials and equipment were freely avail-

able, it would take years of unremitting labour to replace what

has been destroyed. Unfortunately, even after the UNRRA program

in Poland, resources within the country at the beginning of 1947

are inadequate to provide the materials and equipment required.

Both agriculture and industry require extensive capital invest-

ment during the next four or five years. According to the

Provisional National Economic Plan, now in process of revision,

a total gross investment of 3,150 million dollars will be made

in the three years 1947 to 1949. Of this, investment from

current production will provide only about 76 percent of the

total investment required, the remaining 24 percent, or some 770

million dollars, being necessary net investment from abroad, i.e.

- 67 -

an excess of imports over exports. It is important to realize

that Polish production assumed in the Plan depends upon these

overseas investments; any short-fall in the 24 percent would,

because of the normal high rate of depreciation of existing

capital, have a greatly magnified effect on net investment, and

production levels would be very adversely affected.

Foreign Trade 1946 to 1949

The following table describes the foreign trade required by

the Polish Government Four Year NTational Economic Plan. Estim-

ates of exports are based on the assumption that necessary im-

ports are obtained in each year. Failure in any year to obtain

these imports would, by reducing production, involve a reduction

in exports the following year and, therefore, a net increase in

the total imports required during the whole four years if the

Plan is to be achieved. In connection with this table, it should

be noted that prices are based on quotations in June or July

1946, and do not take into account recent price increases.

This table shows that imports required for current produc-

tion fluctuate around 350 million dollars per annum. However,

within this group requirements for food are reduced rapidly to

negligible proportions, while those for raw materials and inter-

mediate products for industry expand from 223 million dollars in

1937 to 350 million dollars in 1949, increasing with Polish in-

dustrial recovery. Exports revive rapidly from 298 million

dollars in 1947 to 485 million dollars in 1949. Thus while, in

1947, there is a deficit of 68 million dollars in exports com-

pared with the imports necessary for current production, this

becomes a surplus in the following year, and in 1949 there is a

surplus Qf 125 million dollars. Import requirements for invest-

- 68 j

ment goods increase very rapidly during the three years from 148

million dollars in 1947 to 415 million dollars in 1949. This is

partly due to the fact that, on account of the difficulties of

matching available exports with required imports of investment

goods through barter agreements with individual countries,

certain investment imports not required for the Plan will be

brought in. These additional investment imports rise from 30

million dollars in 1947 to 100 million in 1949 and almost elimin-

ate the surpluses in 1948 and 1949 which would otherwise have

been available for essential investment imports. Imports of

esssntial capital equipment, which are thus not covered by ex-

ports, amount to 275 million dollars in 1948 and 315 million

dollars in 1949. In total the deficit over the three years is

slightly greater than the essential capital investment and is

771 million dollars.

0

- 69 -

TABLE XIX

Polish Imports and Exports, 1946 - 1949(in Million U.S. Dollars)

All figures expressed on an F.O.B. basis

1946 1947 1948 1949

Imports required forcurrent production

Food 195 136 20 10Other consumption goods 30 7 - -Raw materials and inter-

mediate produots 110. 223 300 350

Total 335 366 320 360Exoorts 126 298 1400 485

Surplus available forinvestment imports -209 - 68 + 80 + 125

Required imports of investmentgoods:

Essential capital equip-ment n.a. 118 275 315

Other investment goodsderived from tradeagreements n.a. 30 70 100

Total 148 148 345 415

* Deficit 357 216 265 290

Source: Polish National Economic Plan (ProvisionalFigures), 1946 and UNRRA Mission to Poland

Imports and Exports in 1947

In many ways 1947 is a critical year for the Polish economy.

In this year there is still the need for food imports on a con-

siderable scale, which must have first priority. Furthermore,

since production in the years 1948 and 1949 will depend upon

success in laying the foundations of expansion in 1947, the im-

portance of fulfilling the investment plan during this year

cannot be stressed too highly. Although an exact analysis is

impossible, it is fairly certain that, due to the devastated

- 70 -

condition of Polish industry, the amount of investment available

from current production would hardly cover depreciation of cap-

ital during the year, and, unless the import program is realized,

instead of expanding rapidly as envisaged in the Plan, the Polish

economy would expand little, if at all. Moreoever, since the

plan has left certain fields of production to be built up with

imported equipment, failure to obtain this equipment would have

widespread repercussions and disrupt production seriously.

In Tables XX and XXI the required imports and the estimated

surplus of indigenous production available for export in 1947

are given in detail.

TABLE XX

Estimates of Poland's Import Requirements in 1947(in million dollars)

Description Value

FoodstuffsCereals 36.5Pulses 3.1Milk 18Meat 43Fish 9Fats 23.25Other Foods 3.15

Total 136

Raw MaterialsCotton 327Tr o 1 35Fibres 20Leather 11Rubber 57food Pulp (for paper industry) 5Ores: ferrous and non-ferrous metals 35Petroleum products 20Chemical raw materials 4oTanning materials 2Greases 5Timber (Railway ties, props etc.) 3Miscellaneous 10

Total 223(Table XX continued on next page)

- 71 -

TABLE XX(Cont'd.)

Estimates of Poland's Import Requirements in 1947(in million dollars)

Description Value

Agricultural SuppliesHorses 22,5CoWers NilBreeding livestock 2Veterinarian equipment, etc. 2Agricultural installations 2Tractors and machines 7.5Inland-water fishing equipment 1Laboratory equipment 1Other tools and machines Nil

Total 38

Essential Capital EquipmentElectric power 10Machine tools 10Industrial and agricultural machines 20Transport installations 10Telecommunications equipment 5Port equipment 15Construction equipment 10

Total 80

Non-essential Capital Equipment 30

* Miscellaneous Consumer Goods 7

GRAND TOTAL 514

Source: UNRRA Mission to Poland

- 72 -

TABLE XXI

Poland's Estimated Exports in 1947(in million dollars)

Coal (20,000,000 tons) 200Non-ferrous metals 12Iron and steel 20Textiles 21Cement, glass, chemicals 25Wood products, feathers, bristles, herbs,

handicraft products 20

Total 298

Source: Polish Government memorandum to the U.N.Temp. Sub-Commission on the EconomicReconstruction of Devastated Areas,TLondon, 1946.

As far as food is concerned the Polish Government is planning

on achieving an average daily intake of 2,131 calories for the

agricultural population and 2,059 calories for the non-farm

population at the retail level in the food year 1946/47 2/ This

is an increase.over the level of consumption in the previous

food year which was 1,680 calories per head per day. After the

hardships of the Polish population during the war this increase

in fPood consumption is considered essential. On this basis it is

estimated that there is a deficit of 848 thousand tons of grain

for consumption alone, to which should be added a requirement of

175 thousand tons representing the necessary increase in stocks

of grain for distribution, bringing the total to 1,023,000 tons.

1/ See Operational Analysis paper No. Agriculture and Food in-Poland, European Regional Office, UNERA, London. In arrivingat the caloric totals, the oalories equivalent of the variousfoods have been based on Polish conversion tables.

- 73 -

It is estimated that, during the calendar year 1947, import re-

quirements will amount to only 560 thousand tons of grain, 45

thousand tons of which will be required for minimum stocks. On

the basis of this food import plan, the intake of the non-farm

population will be equal to only two-thirds of the corresponding

group in the United Kingdom and, though higher than last year,

will still be below the level of emergency subsistence food con-

sumption set by the nutrition committee of the Food and Agricul-

ture Organization of the United Nations. -b, a level which

cannot be long maintained without causing serious ill-health. It

is clear,,'therefore, that Poland's import requirements for food

could scarcely be reduced.

The figure of 38 million dollars for agriculture is largely

for the purchase of 60 thousand horses (22.5 million dollars),

which would be only a small proportion of the total number lost

(1,744 ,00) during the war. These are important not only for

draft power, but for their contribution to the fertilizer prob-

lem. A further item included beoause of the urgent need of

increasing tractive power on farms, and thus increasing agricul-

tural output in Poland, is that of 7.5 million dollars to be ex-

pended for agricultural tractors and machines. These investments

in agriculture are vital if the country is to be self-sufficient

in the year 1948.

Minimum requirements of rawrv materials include 87 million

dollars for the purchase of cotton, wool and other fabrics - an

2/ For European countries this is defined as an average dailyintake of 1,900 calories, requiring a national average supplyof no less than 2,,200 calories at the retail level.

- 74 -

expenditure of 3.5 dollars per capita. This is a low figure in

view of the acute lack of clothing, and Poland's cold climate,

the more so because some of these materials are re-exported in

finished form. Although the value of these materials is higher

than in prevwar years the quantities are approximately the same.

20 million dollars for liquid fuel, 5 million for rubber, are

essential to transport and industry. The remaining raw miaterials

for industry amount to 111 million dollars and seem reasonable

in view of Poland's rapidly expanding industrial capacity which

will involve not only increases in consumption but increases in

0 essential stocks thiroughout the country.

The total requirements of 80 million dollars for capital

equipment are modest. It is obvious that ten million dollars

for machine tools and 20 million for industrial and agricultural

machines are small In view of the tremendous war damage to in-

dustry and transport V1. Finally, ten million dollars for trans-

port installations, ten million for electrical utilities, 15

million dollars for port equipment and ten million dollars for

construction equipment are to be expected because of the destruc-

tion in these fields.

The estimates of exports are maxima, and since they are

based on the most favorable estimates of labor, transport avail-

ability, and spare parts, it is more than probable that at least

some of them will not be met.

The coal figure requires a word of explanation, during 1946

a total of 47.3 million tons of coal was produced, of which 5.5

1/ See page 4, also Operational Analysis Papers Nos. andIndustrial Rehabilitation in Poland and Transport Rehabilitat-ion in Poland. European Regional Office, UNRRA, London.

- 75 -

million tons vwas delivered to the Soviet Union as part of the

reparations settlement effected between the two countries and

8.7 million tons exported under trade agreements. In 1947 it is

expected that production will increase to 60 million tons. l, and

exports to 20 million tons. Requirements for domestic consump-

tion thus increase from 33.1 million tons in 1947 to 40 million

tons. Because of the likelihood of even higher domestic consump-

tion and the bottlenecks of transport and loading equipment, coal

export estimates appear to be optimistic.

Increased resources in non-ferrous metals, iron and steel,

and certain chemicals, will enable Poland to export more of

these commodities than in prewar years, and obtain 57 million

dollars from these exports. Extensive textile manufacturing

equipment acquired in the western territories will also make it

possible to export textiles to the value of 21 million dollars.

The total excess of required imports over estimated exports

is 216 million dollars.

The above figures are provisional. Revised estimates of

Poland's export possibilities in 1947 show about 55 million

dollars derived from textile exports and about 24 million dollars

from exports of sugar. On the other hand, exports of iron and

steel and non-ferrous metals will probably be considerably lower

than the figures above. Owing to these changes, the total value

of exports might be in the neighborhood of 340 million dollars.

There wrtill, however, also be changes in the import figures.

1/ This is contingent upon the Installation of imported coalmining machinery and equipment.

- 76 -

The Balance of Payments in 1947

The total excess of imports over exports given above is on

an F.O.B. basis; it does not take account of any "invisible"

items which must be included in order to measure the full extent

of the excess of Poland's expenditure abroad over her expected

receipts from abroad in 1947. The following "invisible" expen-

ditures must be added to the excess:

a. On account of the world shortage of certain manu-

tured capital goods, and the great competition in

placing orders with manufacturers, payments on

account must be made when ordering investment

goods. In 1947 when the bulk of the orders must

be placed, such payments on account are estimated

at 30 million dollars.

b: Transportation and insurance charges by foreigners

involved in the import of investment goods amount

to 30 million dollars.

Lc. Similar additional costs for food imports are

estimated at 35 million dollars.

d. The required imports were estimated on the assumption

that surplus property material and rolling stock

were already provided for by credits from the

U.S.A. The gross import requirements should,

therefore, be increased by 60 million dollars,

the differenice between the total credits of 90

million dollars which are available and the actual

expenditure of 30 million dollars during 1946.

e. Finally, it is estimated that financial and ad-

ministrative expenses abroad, in connection with

- 77 -

all imports, will amount to 40 million dollars.

The total of these additional expenditures is 195 million

dollars, which would, if there were no offsetting items, bring

the adverse balance to 411 million dollars. Poland's foreign

4trade problem in 1947 is thus resolved into finding the means of

financing this deficit of 411 million dollars.

iTAe will examine in turn the various sources of finance

available. The most obvious means of financing the deficit is

the utilization of any gold and foreign exchange available, but

in Pcland's case it is impossille to finance any of the deficit

in this way. At the end of the war Poland had approximately 71

million dollars' worth of gold and foreign exchange. Although

the United States recently unfroze all Polish blocked accounts

in the United States, valued at ten million dollars, some of the

gold and foreign exchange has been used and today the total re-

mains at alout 70 million, of wrhich 12 million, however, have

heen earmarked in settlement of any debts to the United Kingdom.

* ? Thus, Poland is left with only about 58 million dollars of liquid

assets abroad. This, however, cannot be used for buying imports.

Poland has several commitments to international institutions;

her contribution to the International Monetary Fund and the

International BEnk is 25 million dollars, and she has to pay 307

thousand dollars per annum to the United Nations, 36 thousand

dollars to the European Coal Organization, 40 thousand to

E.C.I.T.O. and 52,400 to the F.A.0. As other international in-

stitutions such as the projected International Trade Organization,

are formed other drains will be made on the available gold and

foreign exchange.

- 78 -

Another fact to be borne in mind is that, although before

the war, in 1937, Poland's foreign assets in the form of bonds,

letters of credit, stocks and shares, cash credits, etc. amounted

to about 70 million dollars, liabilities of the same nature

amounted to about 1,300 million dollars. It should be stressed

that these heavy liabilities abroad still exist, in spite of the

nationalization of large sectors of Polish industry. Although

Poland can, because of the adverse trade balance, make no pro-

vision at present for the indemnification of foreign investors,

the Government has stated its definite intention of making re-

payments in the long run.

In examining Poland's ability to pay for relief and rehab-

ilitation supplies the appropriate UNRRA council committee de-

cided that the country's gold and foreign exchange holdings at

the end of the war were below the minimum necessary for the

sta'oilization of Poland's currency and the fulfillment of her

international obligations. Obviously, the position is no differ-

ent now than at the end of the war; very little of the deficit

can be financed from these holdings.

The second possible source of financing the deficit is the

UNRRA program. Of the total UNRRA program of 481.3 million

dollars only 397.9 million dollars had been delivered in Poland

by the end of 1946. There is available, therefore, some 83

million dollars of further UNRRA supplies in 1947, most of which

will be delivered by the 31st March.

Of this, however, 10 million dollars are for medical supp-

lies which ca'not be counted against the deficit; the UNRRA

program, therefore, provides about 73 million dollars.

Of the 40 million dollars long-term credit given to Poland

- 79 -

by the Import-Export Bank of the United States for the purchase

of rolling stock, and the 50 million dollar credit for the pur-

chase of American Army surplus stores, only 30 million dollars

had been spent by the end of 1946; there is thus available, in

1947, another 60 million dollars for purchases in the United

States.

Finally, it is estimated that available exchange and in-

visible exports in the form of receipts from shipping, transit

trade, remittances from Polish emigrants abroad and private

medium term credits, will amount to about 30 million dollars in

1947.

Although Poland participates to the extent of 15 percent in

the reparations due to the Soviet Union, and although equipment

carried away by the Germans is returned to Poland whenever it

can be identified, the bulk of the reparations will not be re-

ceived during the next three years and it is unlikely that any

appreciable assistance in meeting the deficit will be derived

from these sources, particularly in view of the serious economic

situation in Germany. In total, therefore, Poland's certain

sources of funds in 1947 amount to 162 million dollars. This

leaves a deficit of 248 million dollars which must be raised in

the form of direct relief from abroad, or long term credits.

The Polish Government is now making a new analysis of its

balance of payments in the years 1947-1949, taking account of all

kno.vn factors, including repayment of credits obtained in the

year 1946 through its trade agreements, return of looted equip-

ment from Germany and the utilization of foreign exchange, but it

is believed that the deficit will remain at approximately the

same level, though it will probably be nearer to 240 million

- 80 -

dollars.

What are the prospects in 1947 for Poland receiving such

assistance? All efforts to continue relief to Europe's devastat-

ed countries, either in the form of UNRRA assistance or through

new international relief organizations, have failed. However, it

has been agreed that individual countries should make up their

own programs of relief supplies and that these programs should be

co-ordinated by a special committee of exports of the United

Nations. In practice, this means that the United States, which

will, in any case, be the largest contributor of relief supplies,

is formulating its own program of relief for the various

European countries. There is every hope that Poland will receive

a substantial share in relief in this form not only from the

U.S.A., but from other countries who wish to continue relief

programs. In regard to long-term credits, the creation of the

International Bank has enabled Poland, by becoming a member of

the bank, to apply for a long-term investment credit of 600

million dollars.

Without a more detailed analysis of the individual items in

the Polish requirements for raw materials, capital equipment,

transport charges, and payments on account it is impossible to

depict accurately the exact sources from wihich the long list of

requirements for funds would have to be financed. However, an

attempt has been made in the following table to set out, on the

one hand, the funds required, and on the other, the definite

sources at present knowm, and, finally, the outstanding require-

ments which would have to be satisfied from relief and from the

International Bank. This table, which must of necessity be very

approximate, has been drawn up by the UNRRA Mission on the basis

- 81-

of scattered information regarding the extent to which Poland's

own barter agreements will provide for imports under the various

headings, the undelivered items remaining in the UNRRA program,

and the knowm limitations on the purpose for which the Inter-

national Bank for Reconstruction and Development may loan funds.

It is clear from the table, that Poland will find the great-

est difficulty in financing her deficit of 248 million dollars.

At first sight, it might appear quite easy should the Internat-

ional Bank grant a loan of 600 million dollars. However, the

fact is that, out of the deficit of 248 million dollars, 79

million is in the form of food requirements and 35 million

dollars for expenses in connection with food imports. Since the

International Bank cannot, through its terms of reference, lend

for food, there is, therefore, a need of 114 million dollars

which can only be financed in the form of relief. There is also

another problem; out of the remaining total of 134 million

dollars which might conceivably be lent by the Bank, 33 million

dollars are for raw materials and 50 million dollars for finan-

cial) administrative and transport charges, for both of which

purposes the Bank might be unable to make loans. Summing up the

picture, however, it can be stated that Poland's estimated needs

in 1947 are 114 million dollars in the form of relief for food

impQrts, and 134 million dollars in the form of a long-term

credit from the International Bank.

- 82 -

TABLE XXI.

Requirements and Sources of Funds for Poland's Imports n 1947(in millions of U.S. Dollars)

Requirements from:Require- Known Sources International

Item ment 1/ of Funds Relief Bank

Imports Transit

Food 136 Trade etc. 10 79Exports 12UNRRA 35

Consumption Exports 6goods 7 UNRRA 1 --

Raw materials 223 Exports 191 - 33

Essentialcapital Exports 60equipment 118 UNRRA 37 - 21

Non- es sentialcapitalequipment 30 Exports 30

Exchange:

Payments onaccount forcapitalequipment 30 _ _ 30

Financial, admin-istrative andtransportcharges:a. Food 35 - 35

b. Capital Transitequipment trade,and raw shippingmaterials 70 etc. 20 - 50

Total 649 Exports 298 114 134UNRRA 73Transittrade,etc. 30

1/ 60 million dollars of rolling stock and surplus property areexcluded from this table since the credits have already beenobtained and the item would, therefore, enter on both sidesof the balance sheet.

Source: UNRRA Mission to Poland.

- 83 -

More recent calculations of the balance of payments will al-

most certainly affect the above conclusions. It is believed

that, although the total deficit will be about the same, require-

ments in the form of relief food supplies might be only about

100 million dollars, while requirements for raw materials and

investment goods might be about 150 million dollars. Of the

latter, about 55 million dollars represent costs of raw materials

imports.

Progress is being made towards obtaining these funds. It is

encouraging to note that the committee of the United Nations, in

assessing the needs of various countries for relief, finally

fixed a level of 133.9 million dollars for Poland. In view of

the price changes which have occurred since import requirements

were built up,this amount seems to be approximately the right

order of magnitude, and it is to be hoped that the individual

countries, and particularly the United States, will implement

this decision and provide relief on this scale for Poland, thus

solving her import problem in the food field. The long-term

loan for industrial development is actively under consideration

by the Bank.

1948 and 1949

Turning to the years 1948 and 1949, the problem is somewhat

simpler. We have already seen in table XIX that the excess of

imports over exports in these years totals 555 million dollars,

all of which represents imports of capital equipment for dnvest-

ment. Furthermore, in 1948 and 1949, payments on account (some

30 million dollars), which were made in 1947, will count on the

credit side of the balance sheet, and the only additional charges

which remain will be the financial administrative and transport

- 84 -

charges by foreigners on Polish imports. It is likely that the

latter will b.e offset to some extent by similar Polish charges

to foreigners which are likely to expand considerably as her new

transit trade develops and her merchant marine increases. It

thus seems likely that the total deficit in the twuo years 1948

and 1949 will not be far in excess of 600 million dollars. Latest

estimates Tndicate that it will be about 620 million dollars. If

the loan of 600 mi'llion dollars is granted by the International

Bank and only 13.4 million dollars of this is used in 1947, there

will be 466 million dollars available towrards the 620 million

dollars required. It is, of course, conceivable that by 1949

the prices of capital ecuipment throughout the world will have

fallen, and in this case the loan from the International Bank

.Tould 7robably enable Poland to realize the bulk of her import

program and her Four Year Plan.

To sum up the Polish foreign trade situation as it appears

at the beginning of the critical year 1947, Poland's import pro-

gram wprhich is so essential for success in the agricultural and

industrial rehabilitation of the country, depends upon her receiv-

ing assistance in 1947 from twro sources. First she needs approx-

imately 114 million dollars in the form of an extension of relief.

This is necessitated by the critical food shortage in Poland

which has neen caused by the war, and represents the price, to

the rest of the world, of restoring Poland to self-sufficiency

and laying the basis of future exports of food to non-sufficient

European countries. Secondly, the achievement of the Four Year

Plan in the industrial field is completely dependent upon a

heavy program of investment imports, and to finance these imports,

Poland must receive 600 million dollars from the International

Bank.

- 85 -

It is hardly necessary to analyze the results of failure to

obtain these funds in 1947. Without food, Poland faces a con-

tinuation of meager rations on a bare subsistence level, and

without industrial investment from abroad., she cannot expand her

industrial production appreciably beyond present levels. Com-

pared with the wartime losses and sacrifices of the country, the

715 million dollars involved in helping Poland to her feet again,

is a trivial cost for completing the work that UNRRA began,

particularly when it is remembered that 600 million dollars of

this is a loan and would have to be repaid by Poland when her

industrial recovery was complete.

- 86 -

APPE1TDIX

Trade Agreements Concluded by Polandto 31st December 1946-

U. S. S. R.

(1) Agreement dated: July 7, 1945.

Imports Exports

Quantities of merchandise not stated Quantities of merchandise not statedbut total value is given as but total value is given as 95,000,00095,000,000 Gold Zloty Gold Zloty

(2) Agreement dated: July 7, 1945. To be delivered by Dec. 31st, 1945.

Metric Metrictons tons

Iron, IiIang, & chrome ores 280,750 Coal 4,750,000Tin, copper, nickel, alumin. 2,860 Coke 250,0000Non-ferrous metals 319 Iron and steel 67,000Asbestos XUingerite 770 Zinc 5,000Apatites 40,000 Cadmium 40Kaolin 7,000 Cement 70,000Talcum, non-purified 1,500 Calcinated soda 25,000Gasoline 9,000 Carbide 5,000Lubricants, greases 3,045 Phenilbetanaphthaline 100Diesel fuel 6,000Cellulose 17,000 Total 5,172,140Paper 3,000NTatural & synthetic rubber 350 Also: thous.Chemicals 513 Cotton fabrics 45,000 metersCombed flax 2,400 Woolen " 1,310 "Tobacco 3,400 Military footwear 260 th.prs.Rice 5,000 Window pane glass 200,000 sq. M.Cotton 25,000 Electric bulb assemb. 10,000 th.pcs.Wool 2,600 Glass containers forMiscellaneous seed 16,119 acids 70 '

Total 426,626Additionally the followTing products

UInder the terms of this agreement,, will be exported under this agreementsubject to importance also the in qualntities to be determined later:following comrmodities: rubber products, Metal fancy products,

oak barrels, box shooks, pegs andAnimal castings 40,000 bunches miscellaneousFabric for milling

sieves 2,500 metersScythes 200,000 piecesTraotors 150 "Automobile ("Gar") 150 "

it ("Zis") 1,200 "

Animal hides 100,000 "Driving belts 1,500 sq.mtrs.Films 40,000 meters

and some quantities of rubber belts tobe determined later, also:

Gold 21.63 klg.Platinum screens 57.04 klg,

Total value 297,500,000 Gold Zloty Total' value 297,500,000 Gold Zloty

- 87 -

U.S.S.R. (CoritinLed)

(3) Agreement dated April 12, 1946 To be delivered: March 31, 1947

Imports Exports

Tons Tons1/

Rye 57,000 Coal 1,100,000Barley 45,000 Coke 200,000Oats 15,000 Coal Pitch 13,000Rye 2/ 105,000 Iron and steel 30,000Wheat 2/ 30,000 Tubings 6,100Barley 2/ 40,000 Lead 1,500Millet 12,000 Electrolythic zinc 5,500Buckwheat 2/ 3,000 Refined zinc 40000* Peas 2/ 10,000 Zinc sheets 5,000Grainsl 3/ 100,000 " dust 400

Cadmium 100Calcinated soda 14,000

1/ Against provisions of the agree- Caustic soda 7,000-iment dated Feb. 8th, 1946 Bicarbonated soda 2,600

it purified 2,000

2/ Deliveries to be effected by Carbide 4,000August 1946. Chemicals 10,450

Artificial fibres 6503/ Grain varieties will be Cement 520,000

established separately; delivery Sewer pipes 10,000in August 1946. rt n connections 500

Plate glass 650Fajans 150Porcelain 120

0 Total tons 1,937,720

Additionally: Textiles, glass andglass products etc. and miscellaneous.

Total value $96,000,000.

- 88 _

STIZEDEiN

Agreement dated August 20, 1945 Delivery by December 1, 1946.

Fish and herring 3,000 tons Coal 4,000,000 tonsTurpentine 400 " Coke 800,000Graphite 100 " Salt 25,000Iron Ore 600,000 " Zinc 5,000Vegetable Oil Acids 250 " Zino !Thite 2,500Phosphorus 20 "' Zinc Dust 1,800 "Potassium Hydroxide 10 "AAmron-ia Soda 7,500Tanning extracts 3,900 "Creocote Oil 2,000Glycerine (Dynamite) 100 i" iscellaneous items,Felt for Paper Industry 100 " quantilbies not specifiedDrills 2,000 4,843,800 tonsWaste Paper 20,000 "Paper 40,000Cellulose 6,000Impregnated Paper 50Vulcanized Fibre 125 ihetal Products 4,247 "Yetal Alloys 100Copper and Alloys 393Ball Bearings 1,500 "Iviiscellaneous 500

682,345 i

Additionally: 1,000 calves100 heifers

1,000,000 Electric BulbAssemblies

and 100,000,000 S.Cr. of machiness tools, etc.

Total Value: $50,000,000 Total Value: $50.000,000

- 89 -

DEIMUSLRX

(1) Agreement dated August 29, 1945. Delivery: Until Completion

Imports Exports

Butter 10 r.il. D. Cr. Coal 400,000 tonsBacon 4 " " " Coking Coal 100,000 "Horses 5 " " " iined Coke 100,000Cattle 2 " M " Metallurgical Coke 10,000Seeds 0.5" " " 610,000 "

Fish 2 " " itIiscellaneous 3.5t it Also misc. valued 2 million D. Cr.

Total value 27 million D.Cr.

(2) Agreement dated October 7, 1946. Delivery: October 1, 1947.

Imports Exports

Butter 3,500 tons Coal and coke 1,200,000 tonsPork 2,500 " Coke 100,000 "Lard 500 " Zinc 2,000Meat 2,400 " Tubes 4,500 n

Cryolithe 300 " Zirc 1tThite 1,000 "9,200 tons Red Lead 500 "

Litharge 400 "Lithophane 200

Also Lorses, cattle, seed, herrings, Liquid Gas 60 "industrial products and miscellan1eous. Chemios 1,000

Greaseproof Paper 300

1,310,160 tons

Also: Miscellaneous items, quantitiesnot stated.

Total Value: 129,OQO,OOO Total Value: 129,000,000

- 90 -

ITALY

Agreement dated: October 10, 1946. Deliveries by: October 10, 1947.

Lemons 50,000 L. Coal 750,000 tonsOranges 5,000 L. Eggs 10,000,000 PCs.Castor oil 100 L Potato starch 1,000 tonsAlmond oil 60 L Potato flour 600 "Combed flax 5,000 L iNitrobenzol 10 lFlax fabric 50 L Analine & Paratoluidine 100 "Zinc ore 250,000 L Soot 2,000 "Lead ore 4,000 L Potassium salt 30,000 "Mercury 100 L Vegetable tar 600Metallic magnesiun 500 L Butane and propane 200 "Sulphur crystals 80,000 L Other 500,000 DolarsCelluloid 30 LCelluloid products 10 LSorgo straw 2,000 LBoric oils 25 LRaw oork and products 5,000 LPumice 1,000 LMagnesium carbonate 300 LMagnesium sulphate 500 LCitric acid 200 LTartaric acid 300 LBoric and Boracio acid 600 LLiquorice juice 100 LHerbs 200 LTanning extracts 5,000 LDyes 65,000,000 LMachinery 1,575,000,000 LFilms 12,000,000 LOther 107s000,000 L

1,559,410,075 I.L.

Total imports valued Total exports valued$20,000,000 $20,000,000

- 91 -

FRAUOCE

Agreement dated: July 1, 1946. Delivery by:

Imports Exports

Horses 17,500 Thous. Fr.F Fruit pulp 15,000 Thous. Fr.FSheep 10600 it Herbs 7,000 "

Rabbits- 1,700 l Workers I suits 50,000 "

Fruit 250 " Newspaper 60,000 "Pepper 17,000 " Miscellaneous 100,000 "Spices 4,300 " Seed potatoes 1,000 tonsPerfumery 25,000 " Seeds 265 "

Graphite 6,400 " Hemp & flax refuse 50 IChemicals 2,000 " Willew 10 "

Pharmaceuticals 50,000 " Coal 1,200,000 "Technical Porcelain 5,000 " Pitch 5,000 "

Photographic supplies30,000 Lead 1,000Books & periodicals 50,000 t" Tin 1,000 "

Leather products 5,000 " Chemioals 2,000Transmission belts 2,000 " Cotton fabrics 120Engines 19,000 "ICompressors 5,000 "Pressure regulators 500Equipment 24,300Public utility,highway, indust-rial equipment 32,500 "

Passenger ears 130,0000Spare parts 13,000Instruments 131,000 0Apparatus 45,000Misc. machinery 182,000 "Textile & indust-rial machinery 250,000 ti

FiLms 30,000 iOther 188,000 itGlue 305 tonsRabbit hair 1 "Resin 100 "Cork 200 "

Phosphates 100,000 "Asbestos 10 "

Grinding stones 20Aluminum 250 I

1ron Ore 200,000 "

Scrap iron 10,000Chemicals 1,085 "Dyes, varnish 845 "Talc 500 "

Gelatine 10Pectine 250Refractory brick 80Enamel 100 "

Thread 10 "Paper & products 37Tires 5,000 pcs.Tubes 9,000 t

Imports valued $17,000,000 Exports valued $17,000,000

92-

SWITZERLAVW

(1) Agreement dated: March 4, 1946 Delivery by: September l, 1947

Imports Exports

Food products 2,500,000 S,Fr. Edible mushrooms 250 TonsTextiles 2,500,000 't Seed potatoes 1,500 t

Machinery, instru-ments, etc. 9,500,000 " Casings 200,000 Pcs.

Electric products 1,500,0Q0 Turnip and beet seed 100 TonsPharmaceutical products 3,000,000 " Potato flakes 500Dyes 5,000,000 t Artificial silk 300 "

Mis¢ellaneous 1,000,000 t Animal hair & bristles 25 t

Willow 100 t

Prepared willow 750 "Carbon electrodes 200 t'

M iscellaneous " 500 t

w0 Sheet iron 500 tt

Sheet iron 500Steel cables & ropes 1O0 t

Zinc 3,000 'Arsenic 100 iHerbs 30Ammonium chloride 500 iPhenylbetanaptylamine 200 I

Cresol 1O0 "Coal oil 100 iChemicals 1,630 iPotato starch 300 iLead carbonate 300 t

Red lead 300 i

Zinc white 500 t

Lithopane 500 i0 }+iiscellaneous items,quantities unspecified

Total imports valued 25 million Total exports valued 25 million SwissSwiss Fr. Also merchandise valued Fr. Also one million tons of coalat 48,000,000 Swiss Fr. covered by and coke valued at 48,000,000 Swisscredit deliveries. Fr. to repay credit deliveries.

Total value of imports $17,026,000 Total value of exports $17,026,000

- 93 -

NORINAY

(1) Agreement dated: August 29, 1945 Delivery by: December al. 1945

Imports Exports

Herrings 75,000 Bar Coal and Coke 600,000 Tons

Herrings 25,000 " Bunker coal 30,000

Cod liver oil 100 Ton Total tons 650,000

Imports total value $5,492,955 Exports total value $5,492,955

(2) Agreement dated December 31,1946 Delivery by: December 31, 1947

Cod liver oil 500 Ton Coal 600,000 TonsFish oil 300 " Coke 100,000Oil for canned fish 1,500 " Zino white 500Herring 200,000 Bar Lithopane 200Herring, fresh frozen 6,000 Ton Red lead 100

Fish other 1,OOO " Chemioals 140

Calcium nitrate 13,300 " Sheet iron 200Caliumn cyanamide 10,000 " High pressure tubes 4,000

Pyrites 50,000 " Sewage pipe 300

Vanadium ferro-alloys 1,500 " Cast iron pipe 1,000

Aluminum 500 " Iron sewagp pipe 700

Other miscellaneous items, Cast iron products 500quantities not specified Mlachine tools, chains,

and optical glass, quantitiesnot specified

Total tonnage 707,640

Imports total value 44,940,000 Exports total value 44,940,000Norwegian Kroner Norvwegian Kroner

tJ.S.S.R. ZONE IN GERIENY

Agreement dated Feb. 2, 1946 To be delivered: Dec. 31, 1946.

Imports Exports

Tons Tons

Potassium fert'ilizers 40% 177,.660 Coking coal 40,000Buna 4,000 Gas coal 50 zm/ra 100,000Synthetic gasoline 16,000 " ' 10-50 m/m 100,000Acetone 98% 50 " " unsorted 160,000Nitrate of soda NA NO2 98% 30 Metallurgic coke 400,000Anlydrons acetic acid 98% 30 Pure Benzol 12,500Crystalline anxalio Pressed iiaphthalene 1,600

acid pure 20Potassium Permangamate pure 5 Total tons 814,100

it cyanide 5Sodium cyanide 5Phartaceutical pepsin 1Carbon tetrachloride 99% 1

Total tons 197,807

Value: $10,223,000 Value: $10.,223,000

- 94 -

BULGARIA

Agreement dated April 29, 1946 Delivery: April 30, 1947.

Imports Exports

Lamb hides 120 Tons Iron and steel products 21,251 TonsKid hides 9 " Chemicals 3,313 "

Tobacco 3,127 " Pharmaceuticals 64 "I

3,256 Tons 24,628 Tons

All other commodities subject toindividual agreements

Value of Imports: $7,000,000 Value of Exports: $7,000,000

HOLJAND

Agreement dated December 18, 1946 Delivery by: December 31, 1947

Imports Exports

Tin 500 Tons Coal 100,000 TonsRubber 400 " Refined zinc 1,000 "

Electrical products 4,700,000 D.F1. Lead red 300 "

Industrial diamonds 200,000 " Zinc white 500 "Paint solution 50,000 'K Cadmium 10 "Regenerated rubber 10 Tons Iron & steel products 1,740 ttHospital linen 50,000,000 M2 Ladies hat cones 100,000 D.F1.Laboratory equipnent 50,000 D.F1. Cotton fabrics 2,000,000 IVietersVitamins & prepara- Workers suits 500,000 D.F1.tions 100,000 D.F1. Textile waste 200,000 D.F1.

Pharmaceuticals 250,000 D.F1. Glass 160,000 M2

Aromatic essences 100,000 D.F1. Domestic glass products 50,000 D.F1.0 Paints, Lacquxers & Porcelain 50,000 D.F1.Varnishes 50,000 D,F1. Electric bulbs 2,000,000 Pcs.

Prussian blue & Bristles 40 Tonschrome col. 100,000 D.Fl. Potassium salts 20,000 Tons

Dyes 132,000 D.F1. Seeds 75 "

Artistic paints 15,000 D.Fl. Seeds 30 "

Lithographic paints 50,000 D.F1. Yeast 150 "Chemicals 248,000 D.F1. Herbs 300,000 D.F1.Coffee 300 Tons Other 3,000,000 D.Fl.Cocoa bean 300 "CocOa powder 300Cheese 20Other foodstuffs 50 "

Other 39890 000 D.F1.

Imports total value 22,500,000 D. Fl. Exports total value 22,500,000 D. Fl.

- 95 -

HUNGARY

Agreement dated October 4, 1945 Delivery by December 310 1945

Imports Exports

Dollars Dollars

Beans 81,250 Coking Coal 220,000Peas 68,750 Coal 360,000Paprica 6,000 Unsorted Coal 36,000Sorgha Straw 22,400 Exchange of Coal Varieties 15,000Infusorial Earth 119,000Bauxite 87,500 TOTAL VALUES 631,000Sunflower Oil 35,000Quality Wines 27,500Commercial Wiffines 20,000Brushes 10,000Medicine 60,000Optical MeasuringInstruments 60,000

Miscellaneous 33,600

TOTAL VALUE 631,000

CZECHOSLOVAKIA

(1) Agreement dated July 16, 1946 Delivery: lIay 10, 1945 to April 30,1946

Imports Exports

Free currency in theamount of $2,699,158 Electric Power $2,699,158

(2) Agreement dated July 16, 1946 Delivery: From August 1946 onward

Free currency in theamount of $54,000,000 300 Mega-watts electric

power $34$000,000

- 96

AUSTRIA

Agreement dated September 21, 1946 Delivery by March 31, 1947

Imports Exports

Thousands Thousands

US Dollars US Dollars

Scythes 720 Coal 3,000

Sickles 60 Zinc 500

Drills 200 Ferro-;vianganese 35I\etal 25 Miscellaneous 100

Detonators 140Yielding Wire 20Klingerite 37Precision Instruments 255hiagnesite 12MIagnesite and RefractoryBricks 100

Pneumatic Tools 30Mviedical Apparatus 80Book Printing 100Electro-Technical Machines 250Letal & I1Wood-liforking 170Iviscellaneous 216Other 1,100

TOTAL VALUE 3,635 3,635

0

- 97 -

YUGOSLA.VIA

(1) Agreement dated January 1, 1946 Delivery by June 30, 1946

Imports Exports

Tons Tons

Zinc Concentrate 2,500 Coking Coal 50,000Lead 1,000 Unsorted Coal 125,000Chromium " 1,300 Coke 50,000Bauxite 3,000 Creosote Oil 2,000Raw Magnesite 400 fSodium Chloride 100Electrolytic Copper 500 Axmonium Carbonate 30Antimony 100 Nitric Acid 30Quicksilver 50 Ammonium Nitrate 400Tanning Extracts 600 Pitch Oil 150Leaf Tobacco 200 Sheet Iron 0.5 - 2 m.m. 100

If it 200 Sheet Iron " 300Miscellaneous 57 Sheet Iron 1 - 15 m,m. 600

Scrap Iron 100

TOTAL TONNAGE 9,907 TOTAL TONNAGE 228,810

Total imports valued 1$,225;000 Total exports valued $1,225,000

(2) Agreement dated August 29, 1946 Delivered by:

Zinc Concentrates 3,000.tons Chemicals 1,550 tonsLead Concentrates 2,000 tons Electrodes 300 tonshiagnesite 400 tons Fireproof Clay 550 tonsAntimony 100 tons Shamote Clay 500 tonsTanning Extraots 1,000 tons Eleotrio Detonators 1,000,000 pcs.Leaf tobacco 1,500 tons Electric Time Detonators 1,000,000 pos.Flax Refuse 500 tons Uniform Material 200,000 mtrs.Hops 30 tons Ingot iron 2,000 tonsRaw Opium & Lavender Oil 1 ton Sheet iron 1,000 tonsLiquorice 5 tons Construotion Steel 350 tonsPliscellaneous 500,000 dollars PW,ire 250 tons

Steel 4,300 tonsPaper 500 tonsMiscellaneous 600,000 dollars

Total imports valued 2 million Total exports valued 2 milliondollars dollars

- 98 -

BELGITIf

Agreement dated August 14, 1946 Delivery by September 1, 1947

Imports Exports

Horses 1,350 head Feathers 10 tonsFlax 750 tons Rabbit Hides 65 tonsGelatine 100 tons " " 2,500 pcs.Enamel 200 tons Dextrine 50 tonsGalalith 20 tons Seed Potatoes 100 tonsCaustic Soda 50 tons W.hite Clover Seed 30 tonsChemicals 1,250,000 B.Fr. Herbs 30 tonsChemical Raw Materials 145 tons Coal Tar 5,000 tonsRags 555 tons Potassium Salt 50,000 tonsWool Rags 425 tons Salt 5,000 tonsRubber Conveyor Alcohol 1,000,000 B.Fr*Belting 50,000,000 B.Fr. Wood Tar 50 tons

Refractory Froducts 150 tons Sodium Carbonate 1,000 tonsMirrors and Glass 120 tons Chemicals 1,250,000 B.Fr.Electrolitic Copper 300 tons Leather Refuse 150 tonsCokinig Equipment 20,000,000 B.Fr. Cotton Fabrics 7,500,000 B.Fr.Electric Equipment 14,000,000 B.Fr. Textile Products 2,000,000 B.Fr.Machinery 11,000,000 B.Fr. Textile Products 1,060,000 pCs.Photographic Suppliesl5,000,0O0 B.Fr. New-spaper 1,000 tonsMiscellaneous 50,000,000 B.Fr. Packing Paper 1,000 tons

Cardboard 600 tonsPorcelain 7,000,000 B.Fr.Sanitary Poreelain 3,000,000 B.Fr.Table Glassware 1,500,000 B.Fr.Lead 2,000 tonsEnamelled W'lare 2,500,000 B.Fr.Buttons 1,250,000 B.Fr.Miscellaneous 50,000,000 B.Fr.

Total imports valued 3 million Total exports valued 3 milliondollars dollars

- 99 -

F INIAID

Agreement dated July 5, 1946 Delivery by June 30, 1947

Imports Exports

Dollars Dollars

Horses 560,000 Coal Dust 160,000Stallions 20,000 Coke Dust 600,000Timber 660,000 Bunker 510,000Paper Refuse 147,000 Zinc WThite 97,500Wooden Houses 120,000 Salt 150,000Miscellaneous 187,000 Potassium Salt 3,500

Calcinated Soda 6,300Miscellaneous 1722,700

TOTAL VALUE 1,700,000 TOTAL VALUE 1,700,000

ICELAND

Agreement dated December 11, 1946 Deliveries by October 1, 1947

Imports ExportsTons Tons

-Wool 310 Coal 50,000Salted Hides 100

4 iWool 240

Total imports valued 999 thousand Total exports value 692,500 dollars.dollars Balance to be covered by coal

deliveries in 1948.